What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-29 compared with 2023-02-23 · 444 added, 562 removed, 582 unchanged (63% of the section changed)

The Cigna Group, together with its subsidiaries, is a global health company.

On February 13, 2023, we changed our corporate name from Cigna Corporation to The Cigna Group.

We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Annual Report on Form 10-K.

As such, unless expressly indicated or the context requires otherwise, the terms "Company," "we," "us," and "our" in this document refer to The Cigna Group, a Delaware corporation, and, where appropriate, its subsidiaries.

On February 13, 2023, we also changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name throughout this Annual Report on Form 10-K.

Our common stock continues to be listed with, and trades on, the New York Stock Exchange under the ticker symbol "CI".

The Cigna Group, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us," or "our"), is a global health company.

Our Purpose and Mission

The Cigna Group is a global health company committed to a better future built on the vitality of every individual and every community.

Our employees are trailblazers, relentlessly partnering and innovating solutions for better health.

This captures who we are today – and who we aspire to be in the future.

We are undergoing a revolution in health.

The Cigna Group is a global health company committed to creating a better future built on the vitality of every individual and every community.

We relentlessly challenge ourselves to partner and innovate solutions for better health.

Our Pathways to Growth

6 unchanged sentences

Working together to create even greater value.

Core Strengths

• Deep clinical expertise across pharmacy, medical and behavioral.

1 unchanged sentence

• Focus on developing innovative solutions addressing needs of customers, patients and clients.

• Partnering with others to accelerate innovation and achieve greater impact.

• Partnering with others to accelerate innovation and create sustainable impact.

• Consultative approach driven by an experienced and talented team.

The last couple of years have reoriented every person, every organization and every community toward a deeper relationship with health.

We believe that achieving both health and vitality for those we serve must fuel the actions of our over 70,000 colleagues around the world, each and every day.

At The Cigna Group, we relentlessly challenge ourselves to partner and innovate solutions for better health.

Our global workforce of approximately 72,500 colleagues work to fulfill our mission to improve the health and vitality of over 164 million customer relationships in more than 30 markets and jurisdictions.

We have two growth platforms:

Evernorth Health Services and Cigna Healthcare.

Evernorth Health Services is our pharmacy, care and benefits solution that is highly attractive to our clients and partners because of the depth of its capabilities and expertise.

Evernorth Health Services is our pharmacy benefits, specialty and care solution that is highly attractive to our clients and partners because of the depth of its capabilities and expertise.

Evernorth Health Services also enables us to deepen existing relationships across our entire book of business.

Cigna Healthcare is the health benefits provider of The Cigna Group, serving customers and clients for our U.S.

Commercial, U.S.

Government and International Health operating segments, and it allows us to harness our partnership relationship with physicians to deliver affordable and coordinated health care to employers and individuals.

Together, Evernorth Health Services and Cigna Healthcare provide a strong and diverse foundation that allows us to capitalize on growth opportunities by leading with our strengths – medical and pharmacy solutions – and then expanding those relationships by addressing additional client needs and innovating and delivering new services and solutions.

To transform the differentiated value we deliver to our customers, patients, clients, communities and investors into attractive, sustained growth, we continue to cultivate our portfolio of businesses with the goal of consistently delivering the foundational growth , accelerated growth and opportunity for cross-enterprise leverage we expect today and in the future.

When considering our broad portfolio of businesses, we have strong foundational businesses that will continue to grow.

These businesses often serve as the key entry point for clients with either a

pharmacy relationship, a medical relationship or both.

We also have a variety of accelerated growth businesses, both scaled and emerging, which build upon our foundational relationships or provide exposure to adjacent high-growth areas.

Our cross-enterprise leverage provides us with an opportunity to unlock even more value as the combined power of the franchise is unleashed.

The Cigna Group's employees are champions for the people we serve and over the past decade, our focus has shifted to helping individuals and families thrive by offering solutions to prevent and better manage health challenges.

When sickness or disability do occur, we support our customers by offering broad choices to help them best access high quality, affordable, whole person care.

We see three primary ways to help individuals maintain, improve or recover their physical or mental health:

1) behavioral and lifestyle changes – with health coaches helping individuals set and meet health goals;

2) affordable, effective medication options – with access to our leading pharmacy services improving health and driving affordability;

and 3) targeted medical and surgical interventions – with a clear and proven strategy around partnerships and value-based care quality programs, powered by data and analytics and aligned incentives.

We maximize use of evidence-based care, while delivering best-in-class service for our customers with acute and chronic conditions through enhanced real-time insights across an expanded platform with industry-leading solutions to support care decisions.

Healthcare and International Health operating segments, and it allows us to harness our partnership relationship with physicians to deliver affordable and coordinated health care.

Our portfolio of offerings solves diverse challenges across the health care system.

We offer a differentiated set of pharmacy, medical, behavioral, dental and supplemental products and services, primarily through two growth platforms:

Evernorth Health Services and Cigna Healthcare.

Our capabilities include:

2 unchanged sentences

3) leading specialty pharmacy, clinical and care management expertise;

and 4) advanced analytics that help us engage more meaningfully with individuals, the plan sponsors we serve and our provider partners.

We differentiate ourselves in the market through a number of capabilities.

We improve whole-person health, in body and mind by treating physical and behavioral health together to improve outcomes and by providing early behavioral and lifestyle interventions.

We make it easier to access quality care by improving navigation at every step in a patient's health journey and by meeting customers wherever they are - virtually, digitally and in home.

We connect care for the most pressing conditions by closing gaps between hospitals, primary care providers, specialists and other health care providers.

We also develop personalized treatment paths across every dimension of care.

We continue to build upon our network of value-based provider arrangements for better customer experiences, better overall health outcomes and greater affordability, with a significant number of our eligible customers aligned to our Accountable Care programs nationally.

We make medicine more affordable by reducing costs from start to finish, including those related to drug access, delivery and treatment and by identifying appropriate medication alternatives.

We partner and innovate to enable us to deliver differentiated value and broaden our reach in new geographies or through the introduction of new solutions and offerings.

Our key to success revolves around how deeply we care about our customers, patients and co-workers.

We intend to create a better future together by innovating and adapting, acting with speed and purpose, partnering, collaborating and keeping our promises.

and 4) advanced analytics that help us engage more meaningfully with those we serve.

Together, Evernorth Health Services and Cigna Healthcare provide a strong and diverse foundation that allows us to capitalize on growth opportunities by leading with our strengths – pharmacy and medical solutions – and then expanding those relationships by addressing additional client needs and innovating and delivering new services and solutions.

When considering our broad portfolio of businesses, we have strong foundational businesses that we expect to continue to grow.

These businesses often serve as the key entry point for clients with either a pharmacy relationship, a medical relationship or both.

We also have a variety of accelerated growth businesses, both scaled and emerging, which build upon our foundational relationships or provide exposure to adjacent high-growth areas.

Our cross-enterprise leverage provides us with an opportunity to unlock even more value as the combined power of the franchise is unleashed.

Information about Segments

We present the financial results of our businesses in the following segments (see "Executive Overview" section of the Management Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a Financial Summary):

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in Pharmacy Benefits, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions, which are provided to health plans, employers, government organizations and health care providers.

Within Evernorth Health Services, Pharmacy Benefits and Home Delivery Pharmacy are foundational growth businesses and Specialty Pharmacy, Distribution, and Care Delivery and Management Solutions are accelerated growth businesses.

We present the financial results of our businesses in the following segments (see "Executive Overview" section of Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a Financial Summary):

Evernorth Health Services partners with health plans, employers, governmental organizations and health care providers to solve challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

Within Evernorth Health Services, pharmacy benefits and home delivery pharmacy are foundational growth businesses and specialty pharmacy, specialty distribution, and care delivery and management solutions are accelerated growth businesses.

Cigna Healthcare includes the U.S.

Commercial, U.S.

Government and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.

Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.

During the fourth quarter of 2023, the U.S.

Commercial and U.S.

Government operating segments merged to form the U.S.

Healthcare operating segment.

Healthcare provides commercial medical plans and specialty benefits and solutions for insured and self-insured clients (U.S.

Employer), Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans.

International Health provides health care solutions in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

Within Cigna Healthcare, U.S.

Commercial and International Health are our foundational growth businesses and U.S.

Government is our accelerated growth business.

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exiting businesses.

Employer and International Health are foundational growth businesses.

In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S.

Healthcare operating segment to Health Care Service Corporation ("HCSC") for $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions (the "HCSC transaction").

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exited businesses.

Our ongoing businesses include our continuing business, corporate-owned life insurance ("COLI"), and our run-off businesses.

Our run-off businesses include (i) guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business, (ii) settlement annuity business and (iii) individual life insurance and annuity and retirement benefits businesses.

Our exiting businesses include our interest in a joint venture in Türkiye, which was sold to our partner in December 2022, the international life, accident and supplemental benefits businesses sold on July 1, 2022 and the Group Disability and Life business sold on December 31, 2020.

On July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings, Inc.

("Chubb") for approximately $5.4 billion in cash (the "Chubb transaction") (see Note 4 to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K).

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs and intersegment eliminations for products and services sold between segments.

Our run-off businesses include (i) variable annuity reinsurance business (formerly referred to as guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business), (ii) settlement annuity business and (iii) individual life insurance and annuity and retirement benefits businesses.

Our exited businesses include the international life, accident and supplemental benefits businesses sold in July 2022 (the "Chubb transaction") and our interest in a joint venture in Türkiye sold in December 2022.

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs and eliminations for products and services sold between segments.

Cross-enterprise Leverage

Cross-enterprise leverage enables us to uniquely use the depth and breadth of our wide-ranging capabilities across the enterprise to create more value, expand our reach and drive growth.

We look across our enterprise at our client relationships within both Evernorth Health Services and Cigna Healthcare and seek to deepen them by leveraging our entire suite of capabilities.

Cross-enterprise leverage brings teams from across the enterprise together in a quick, efficient and organized manner to move from ideation to solution creation to meet client's evolving needs.

Evernorth Health Services offerings, such as the Express Scripts PBM, Accredo Specialty Pharmacy, and Evernorth Care behavioral health solutions, are available within Cigna Healthcare solutions.

This broadens Evernorth Health Services’s presence in the total health care delivery system, and expands the breadth and depth of offerings available to Cigna Healthcare clients and customers while improving affordability, access, quality of care, care innovations and transparency.

A recent product innovation is Pathwell Bone & Joint - a Cigna Healthcare solution powered by Evernorth Health Services.

Pathwell Bone & Joint delivers affordability to clients via an enhanced digital customer experience and customized clinical navigation through a care advocate.

During 2023, this program was offered to Cigna Healthcare U.S.

Employer clients.

Other Information

1 unchanged sentence

In the segment discussions that follow, we use the terms "adjusted revenues" and "pre-tax adjusted income (loss) from operations" to describe segment results.

See Note 24 to the Consolidated Financial Statements of this Form 10-K for definitions of those terms.

Note 25 to the Consolidated Financial Statements of this Form 10-K for definitions of those terms.

Industry rankings and percentages set forth herein are for the year ended December 31, 2023, unless otherwise indicated.

In addition, statements set forth in this document concerning our rank or position in an industry or particular line of business have been developed internally based on publicly available information unless otherwise noted.

Cigna Holding Company (formerly Cigna Corporation) was incorporated in Delaware in 1981.

Halfmoon Parent, Inc.

was incorporated in Delaware in March 2018.

Halfmoon Parent, Inc.

was renamed Cigna Corporation and Cigna Holding Company became its subsidiary concurrent with the consummation of the combination with Express Scripts on December 20, 2018.

The Cigna Group, through its predecessor companies, was incorporated in Delaware in 1981.

Cigna Corporation was renamed The Cigna Group in February 2023.

13 unchanged sentences

EVERNORTH HEALTH SERVICES

These offerings are also integrated into our Cigna Healthcare solutions to span the total health care delivery system, further

reducing the total cost of care for our clients and customers.

Evernorth Health Services includes a broad range of independent and coordinated health solutions and capabilities designed to enable the health care system to work better and help people live richer, healthier lives.

Health plans, employers, governmental organizations and health care providers partner with Evernorth Health Services to solve their biggest challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

In 2023, Evernorth Health Services reported adjusted revenues of $153.5 billion and pre-tax adjusted income from operations of $6.4 billion.

On February 13, 2023, we changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name throughout this Annual Report on Form 10-K.

Evernorth Health Services accelerates delivery of comprehensive, connected solutions to create value and meet the diverse needs of health plans, employers, health care providers and government organizations by:

• Partnering in unconventional ways to solve complex problems across a fragmented health care ecosystem, fueled by data and expertise that drives purposeful innovation

• Creating flexible solutions tailored to client needs, using Evernorth Health Services' combined strengths and capabilities, as well as strategic partnerships, to deliver:

Since the launch of the Evernorth Health Services brand, we have continued to grow and serve more people.

Today, Evernorth Health Services is made up of dozens of businesses across pharmacy benefit, specialty and care services.

All products and services below are part of the Evernorth Health Services offering.

How We Deliver

• Deep clinical expertise when evaluating medicines, digital therapeutics and other health solutions for efficacy and value to assist clients in selecting a cost effective formulary.

• Affordable solutions that provide more value and drive risk-sharing and value-based care.

• Flexible solutions tailored to client needs, using Evernorth Health Services' combined strengths and capabilities, as well as strategic partnerships, to deliver:

better, more efficient care for patients;

1 unchanged sentence

and enhanced choices for clients and customers through our open architecture model.

• Evaluating medicines, digital therapeutics and other health solutions for efficacy, adherence, value and price to assist clients in selecting a cost-effective formulary

• Offering home delivery, virtual and in-person care, and specialty customer-centric solutions that meet the needs of our clients and customers in ways that unlock greater value and better health services while providing better and specialized clinical care

• Delivering more affordable solutions that provide more discounts and drive risk-sharing and value-based care

• Promoting the use of generics and lowest-cost, clinically effective brands of medications

• Talented, experienced and caring people who work as consultative partners to solve complex problems across a fragmented health care ecosystem, fueled by data and expertise that drives purposeful innovation.

The following chart depicts a high-level summary of our principal products and services in this segment with definitions on subsequent pages.

1 unchanged sentence

Subsidiaries Key Relationships Primary Competitors

Driving Foundational Growth Pharmacy Benefits Express Scripts PBM, myMatrixx ® , Care Continuum, Express Scripts MedRx Management SM , Embarc Benefit Protection ® , FamilyPath SM , Advanced Utilization Management, Enhanced Fraud, Waste & Abuse, Ascent Health Services, Econdisc, SaveOnSP, Inside Rx ® , Evernorth Wholesale Marketplace SM , Value-Based Programs (Express Scripts SafeGuardRx ® , Express Scripts Patient Assurance ® ), National Preferred Formulary, Advanced Opioid Management ® , ScreenRx ®

Pharmacy Benefit Services - Driving Foundational Growth Pharmacy Benefits Express Scripts PBM, National Preferred Formulary, myMatrixx ® , Express Scripts MedRx Management SM , Advanced Utilization Management, Enhanced Fraud, Waste & Abuse, Ascent Health Services, Econdisc Contracting Solutions, Copay Assurance ® , Inside Rx ® , Evernorth Wholesale Marketplace SM , Value-Based Programs (Express Scripts SafeGuardRx ® , Express Scripts Patient Assurance ® , EncircleRx SM )

Clients, Customers, Health Care Providers, Consultants, Health Plans, Commercial and Government Payors, Self-paying Customers, Pharmacy Providers Health Plans, Independent Pharmacy Benefit Managers ("PBMs"), Managed Care PBMs, Third-Party Benefit Administrators, Group Purchasing Organizations, Clinical Solutions and Health Care Data Analytics Companies

Home Delivery Pharmacy Express Scripts Pharmacy ®

Clients, Customers, Health Care Providers Independent PBMs, Managed Care PBMs, Retail Pharmacies

Driving Accelerated Growth Specialty Pharmacy Accredo ® , Freedom Fertility Pharmacy ® , Therapeutic Resource Center ®

Clients, Customers, Health Care Providers Retail Pharmacies, Home Delivery Pharmacies

Specialty and Care Services - Driving Accelerated Growth Specialty Pharmacy Accredo ® , Freedom Fertility Pharmacy ® , Therapeutic Resource Center ®

Clients, Customers, Health Care Providers, Specialty Drug Distributors Specialty Pharmacies

Distribution CuraScript SD ®

Clinics, Hospitals Specialty Drug Distributors

Care Delivery and Management Solutions Evernorth Care Group, Evernorth Care Services, Evernorth Care Solutions, Evernorth Direct Health, Evernorth Home-Based Care, eviCore Healthcare ® , MDLIVE ® , Evernorth Behavioral Health, inMynd SM , Health Connect 360 ® , RationalMed ® , Evernorth Digital Health Formulary SM , Evernorth Labs, Trend Central ® , HealthPredict SM , MediCUBE ® , ScriptVision ®

Clients, Customers, Health Care Providers Managed Care Organizations, Care Delivery and Care Management Solutions Providers, Third-Party Benefit Administrators, Health Care Data Analytics Companies

Specialty Distribution CuraScript SD ®

Clinics, Hospitals, Physicians' Offices, Pharmacies, Alternative Sites of Care Specialty Drug Distributors

Care Delivery and Management Solutions eviCore Healthcare ® , Evernorth Behavioral Health, Evernorth Home-Based Care, MDLIVE ® , inMynd SM , Health Connect 360 ® , RationalMed ® , Evernorth Digital Health Formulary SM

Clients, Customers, Health Care Providers, VillageMD, Health Plans Managed Care Organizations, Care Delivery and Care Management Solutions Providers, Third-Party Benefit Administrators, Health Care Data Analytics Companies

Principal Products & Services

Pharmacy Benefit Services

• Pharmacy Benefits.

Express Scripts Pharmacy dispenses approximately 1.6 billion adjusted prescriptions (1) annually to members of pharmacy plans managed by our Express Scripts PBM.

We drive high-quality, cost-effective care through prescription drug utilization and cost management services.

We support our clients' plan design selections to deliver balanced affordability, choice, simplicity and convenience.

We focus our solutions to align with our clients' service, care and cost management needs.

As a result, we believe we deliver better care, healthier outcomes, higher customer satisfaction and a more affordable prescription drug benefit.

We dispense drug claims via Express Scripts Pharmacy, Accredo and our retail networks by integrating retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management and pharmacy fulfillment services.

We administer payments to retail networks and bill benefits costs to our clients through our end-to-end adjudication services.

We drive high-quality, cost-effective pharmacy care through a range of services.

We adjudicate drug claims from Express Scripts Pharmacy, Accredo and retail network participants, and provide retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and other services.

◦ Retail Pharmacy Network Administration.

We contract with retail pharmacies to provide prescription drugs to customers of the pharmacy benefit plans our clients offer.

We negotiate with pharmacies throughout the United States to discount drug prices and offer national and regional network options responsive to client preferences related to cost containment, convenience of access for customers and network performance.

We also manage networks of pharmacies customized for or under direct contract with specific clients and have contracted with pharmacy provider networks to comply with the Center for Medicare and Medicaid Services ("CMS") access requirements for the federal Medicare Part D prescription drug program ("Medicare Part D").

◦ Drug Formulary Management.

▪ Formularies are lists of drugs with designations that may be used to determine drug coverage, customer out-of-pocket costs and communicate plan preferences in competitive drug categories.

Our formulary management services support clients in establishing formularies that assist customers and physicians in choosing clinically-appropriate, cost-effective drugs and prioritize access, safety and affordability.

▪ We administer specific formularies for our clients, including standard formularies developed by Express Scripts and custom formularies in which we play a more limited role.

Many of our clients select standard formularies, governed by our National Pharmacy & Therapeutics Committee ("P&T Committee"), our Therapeutic Assessment Committee ("TAC") and our Value Assessment Committee ("VAC").

These committees work together to develop recommendations for formularies that first consider clinical results independent of price

considerations.

Only after these clinical reviews are completed and codified are other factors such as net cost, market share and drug utilization trends considered for the final development of our formularies.

▪ One of the ways we manage our drug formulary is through negotiating to secure additional affordability for the benefit of our clients based on the utilization of certain prescription drugs and supplies which can be paid to us in the form of a rebate.

With respect to our clients' rebate arrangements, most chose to receive the greater of a minimum rebate guarantee or a contractually agreed-upon percentage of rebates.

In some rebate arrangements, Express Scripts PBM takes on the risk of securing the rebate value necessary to meet the value guaranteed to its client.

The actual amount of value secured by Express Scripts PBM is dependent upon the result of its negotiations for rebates.

In 2023, the Express Scripts PBM shared over 95% of the drug formulary management rebates it received with its PBM clients, and two-thirds of its clients received 100% of rebates.

◦ Benefits Design Consultation.

We consult with our clients on how best to structure and leverage the pharmacy benefit to meet plan objectives for affordable access to the prescription medications customers need to stay healthy and to ensure the safe and effective use of those medications.

◦ Drug Utilization Review Program.

2 unchanged sentences

Clients may also choose to enroll in programs that result in communications about potential therapy concerns being sent to prescribers after the initial claim submission.

◦ Benefits Design Consultation.

myMatrixx is a unique PBM with an exclusive focus on workers' compensation.

myMatrixx is a PBM with an exclusive focus on workers' compensation.

We combine high-touch customer service with clinical expertise and state-of-the-art business intelligence systems to deliver simplified solutions and positive outcomes.

myMatrixx leverages Express Scripts' robust pharmacy network and provides a smooth and personalized experience for clients and injured workers.

(1) Non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by three.

All other network and specialty scripts are counted as one script.

◦ Medical Drug Management.

We offer a comprehensive range of services and guaranteed savings for managing medically billed specialty drugs.

Our solutions apply utilization management, site of care management and claims prepayment review to effectively reduce wasteful spend, while providing services tailored to customers ensuring safety and healthier outcomes.

We also offer Express Scripts MedRx Management, a suite of solutions and consultative services for medical rebates contracting, medically-billed drug preferencing and value-based contracting.

◦ Embarc Benefit Protection.

Embarc shields clients and members from the high costs of life-saving gene therapies, so that customers who need treatment can get it.

Additionally, the program provides access to quality, cost-effective in-network providers and support from a dedicated gene therapy case management team.

◦ FamilyPath.

FamilyPath is raising the bar for fertility health by providing more comprehensive and more flexible coverage and proactive care for growing families, including expanded medical and pharmacy benefit management;

access to vetted provider and lab networks;

and dedicated Fertility Advisors to proactively support and guide customers.

◦ Retail Network Pharmacy Administration.

We contract with retail pharmacies to provide prescription drugs to customers of the pharmacy benefit plans we manage.

We negotiate with pharmacies throughout the United States to discount drug prices provided to customers and manage national and regional networks responsive to client preferences related to cost containment, convenience of access for customers and network performance.

All retail pharmacies in our network communicate with us online and in real-time to process prescription drug claims.

◦ Drug Formulary Management.

Formularies are lists of drugs with designations that may be used to determine drug coverage, customer out-of-pocket costs and communicate plan preferences in competitive drug categories.

We administer specific formularies on behalf of our clients, including standard formularies developed and offered by Express Scripts and custom formularies in which we play a more limited role.

Most of our clients select standard formularies, governed by our National Pharmacy & Therapeutics Committee, which is comprised of a panel of independent physicians and pharmacists in active clinical practice representing a variety of specialties and practice settings, typically with major academic affiliations.

In making formulary recommendations, this committee considers only the drug's safety and efficacy and not the cost of the drug, including any negotiated manufacturer discount or rebate arrangement.

This process is designed to ensure the clinical recommendation is not affected by our financial arrangements.

We fully comply with this committee's clinical recommendations regarding drugs that must be included or excluded from the formulary based on their assessment of safety and efficacy.

We also offer Express Scripts MedRx Management, a multifaceted medical drug strategy, developed to provide both clinical and financial value to clients.

◦ Advanced Utilization Management.

These programs include prior authorization, drug quantity management and step therapy designed to decrease client spend on pharmacy.

These programs include prior authorization, drug quantity management and step therapy designed to ensure clinically appropriate medication use and avoid unnecessary client pharmacy spend.

◦ Enhanced Fraud, Waste & Abuse.

We help plan sponsors identify potential problem customers and prescribers with unusual or excessive utilization patterns.

We help plan sponsors identify customers and prescribers with potentially unusual or excessive utilization patterns.

The program is designed to help identify outliers and situations of abnormal use or prescribing patterns by analyzing types of prescriptions, refill patterns and pharmacy utilization.

◦ Administration of Group Purchasing Organizations.

We operate various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals and formulary rebates with pharmaceutical manufacturers on behalf of their participants.

They also provide various administrative services to their participants including management and reporting.

◦ Copay Solutions.

Our first-to-market innovative copay solutions help customers afford their medications, protect plan design preferences and achieve lower trend.

Our partnership with SaveOnSP on the first non-essential health benefits copay assistance solution has driven significant savings by targeting high-cost, high-volume drugs.

SaveOnSP recommends plan design and coverage changes for certain drugs, enabling maximum savings and reducing plan and client costs.

As manufacturer programs and regulations change, this aggressive solution adapts, delivering lower specialty plan cost and enhanced customer support.

We operate various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals or formulary rebates with pharmaceutical manufacturers on behalf of their participants.

These groups also provide various administrative services to their participants including management and reporting.

Inside Rx is a prescription medication savings program that offers eligible self-paying customers discounts on many brand and generic medications.

This program is not insurance but offers savings at more than 60,000 participating retail pharmacies (including all major chains) in the United States and Puerto Rico.

This program is not insurance but offers savings at nearly 60,000 participating retail pharmacies (including all major chains) in the United States and Puerto Rico.

The program also offers discounts on prescription medications through private label solutions.

Inside Rx earns a small fee from our supply chain partners every time a customer fills a prescription via the program.

This lets us provide access to our savings card at no cost to the customer.

◦ Evernorth Wholesale Marketplace.

Evernorth Wholesale Marketplace offers a suite of flexible, private label solutions including but not limited to Wholesale Marketplace Drug Formulary Management services, Retail Network Programs, Value-Based Solutions, Medical Rebate Programs and Utilization Management Policies.

Evernorth Wholesale Marketplace offers a suite of flexible, private label PBM solutions including but not limited to a Pharmacy Rebate Program, a Retail Network Program, Value-Based Solutions, a Medical Rebate Program and Utilization Management Policies.

These offerings are captured under either our drug formulary administrative service arrangements or our formulary processing arrangements.

As the needs of the market evolve, we will continue to partner with clients and develop additional offerings that align with their goals and objectives.

◦ Value-Based Programs.

▪ Express Scripts SafeGuardRx.

We offer a solution platform aimed at therapy classes that pose budgetary threats and clinical challenges to customers.

Our solutions are designed to keep our clients ahead of the drug cost curve while providing customers the personalized care and access they need.

We offer a solution platform aimed at therapy classes that pose budgetary threats to clients and clinical challenges to customers.

Our solutions are designed to help keep our clients ahead of the drug cost curve while providing customers the personalized services and access they need.

These solutions are offered throughout our pharmacy benefit management services and include, but are not limited to, care for:

cardiovascular, diabetes, hepatitis, HIV, inflammatory conditions, neurological, multiple sclerosis, oncology, pulmonary, rare conditions and weight management.

Innovative programs, such as Express Scripts SafeGuardRx, combine utilization management, formulary management, specialized care from our Therapeutic Resource Centers and financial savings, to help us to change the market in key categories.

These services optimize the safe and appropriate dispensing of therapeutic agents, minimize waste and improve clinical and financial outcomes.

▪ Express Scripts Patient Assurance Program.

This program addresses affordability challenges for customers managing their diabetes and cardiovascular conditions by providing a lower, fixed, out-of-pocket cost directly to the customer.

Express Scripts negotiates additional discounts to reduce customer cost share without increasing plan cost, and applies those discounts at the point of service.

By making the cost of medication affordable and predictable, the Express Scripts Patient Assurance Program improves medication adherence, driving better customer outcomes and lower downstream medical costs for the plan.

Innovative Express Scripts SafeGuardRx programs may include utilization management, specialized expertise from our Therapeutic Resource Centers and financial savings.

▪ Express Scripts Copay Assurance and Patient Assurance Programs.

The Copay Assurance program caps consumer out-of-pocket costs for certain prescription drugs under a client's prescription drug benefit.

The Patient Assurance Program addresses affordability challenges for customers managing their diabetes and cardiovascular conditions by providing a lower, fixed, out-of-pocket cost to the customer by negotiating additional discounts to reduce customer out-of-pocket costs, and applies those discounts at the point of service.

▪ Express Scripts EncircleRx.

EncircleRx is a data-driven solution that helps clients reduce costs and enhance outcomes for chronic condition categories.

EncircleRx focuses on ensuring the right patient population has the correct access, prescriber and pharmacy management parameters in place and provides ongoing patient support in order to track responses to therapy and demonstrate patient outcomes.

• Home Delivery Pharmacy.

Evernorth Health Services offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home and allows for automatic refills on eligible medications and unrestricted telephone access to over 4,000 customer care advocates and specially trained pharmacists to answer customer questions.

Our differentiated practice of pharmacy, coupled with our advanced automated dispensing technology, results in safer and more accurate pharmacy operations when compared to retail pharmacies, convenient access to maintenance medications and better management of our clients' drug costs through operating efficiencies and generic substitutions.

Our research shows that Express Scripts Pharmacy achieves a higher level of therapeutic interventions, better adherence, more cost savings and a consistently higher Net Promoter Score (marketplace "NPS") compared to retail pharmacies.

The Home Delivery Pharmacy operations consist of ten home delivery pharmacies and four high-volume automated dispensing pharmacies located throughout the United States.

Our high-volume automated dispensing pharmacies are located in Arizona, Indiana, Missouri and New Jersey.

Our Express Scripts Pharmacy offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home and allows for automatic refills on eligible medications and unrestricted telephone access to customer care advocates and specially trained pharmacists to answer customer questions.

Our differentiated practice of pharmacy, coupled with our advanced automated dispensing technology, results in safer and more accurate pharmacy operations when compared to retail pharmacies, convenient access to maintenance medications and better coordination with management of our PBM clients' drug costs through operating efficiencies and generic substitutions.

The Home Delivery Pharmacy operations consist of thirteen licensed pharmacies, including four fulfillment pharmacies.

Our fulfillment pharmacies are located in Arizona, Indiana, Missouri and New Jersey.

Specialty and Care Services

• Specialty Pharmacy.

1 unchanged sentence

These medications broadly include those with frequent dosing adjustments, intensive clinical monitoring, the need for customer training, specialized product administration requirements or medications limited to certain specialty pharmacy networks by manufacturers.

The front-end of our pharmacy is organized into Therapeutic Resource Centers, where pharmacists focus their practice of pharmacy by condition, which offers customers a more personalized experience while providing enhanced clinical care.

Through a combination of assets and capabilities, we work to provide an enhanced level of predictable care and therapy management for customers taking specialty medications, leading to increased visibility and improved outcomes for payors and custom programs for biopharmaceutical manufacturers.

The launch of biosimilars to blockbuster specialty therapies provides competition and an opportunity to drive down costs for both customers and clients.

We work closely with clients to efficiently support each benefit design to improve affordability.

The front-end of our pharmacy, anchored by Accredo, is organized into Therapeutic Resource Centers, where pharmacists focus their practice of pharmacy by condition.

Accredo is focused on dispensing injectable, infused, oral and inhaled drugs that require a higher level of clinical service and support than traditional pharmacies typically offer.

Accredo supports successful outcomes for customers and reduces waste for clients through specialty trained clinicians, a nationwide footprint and a network of in-home nursing services, reimbursement and customer assistance programs and biopharmaceutical services.

Accredo supports successful outcomes for customers and reduces waste for clients through our specially trained clinicians and network of in-home nursing services, our nationwide footprint, our drug reimbursement services and by helping customers access assistance programs.

Drug manufacturers may select Accredo for exclusive dispensing of highly specialized therapies.

Freedom Fertility Pharmacy is dedicated exclusively to supporting customers undergoing fertility treatment.

Accredo and Freedom Fertility Pharmacy serve customers within a pharmacy benefit plan administered by Express Scripts PBM, as well as customers in plans administered by other PBMs and health plans.

Our Specialty Pharmacy operations consist of 33 specialty pharmacies.

• Distribution.

Our Specialty Pharmacy operations consist of 31 licensed pharmacies.

• Specialty Distribution.

CuraScript SD is a specialty distributor of pharmaceuticals and medical supplies (including injectable and infusible pharmaceuticals and medications to treat specialty and rare or orphan diseases) directly to health care providers, clinics and hospitals in the United States for office or clinic administration.

Through this business, we provide distribution services primarily to office and clinic-based physicians who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals.

This business provides competitive pricing on pharmaceuticals and medical supplies, operates three distribution centers and ships most products overnight within the United States;

it also provides distribution capabilities

to Puerto Rico and Guam.

It is a contracted supplier with most major group purchasing organizations and leverages our distribution platform to operate as a third-party logistics provider for several pharmaceutical companies.

Through this business, we provide distribution services primarily to health care providers who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals.

This business operates three distribution centers and ships most products overnight within the United States.

It is a contracted supplier with most major group purchasing organizations and leverages its distribution platform to operate as a third-party logistics provider for several pharmaceutical companies.

• Care Delivery and Management Solutions.

We offer clinical programs to help our clients drive better whole-person health outcomes through our Care Delivery (virtual care, in-home care, physical primary care) and Care Management (behavioral health services and health coaching capabilities) offerings.

eviCore healthcare is a medical benefits management organization that is a leading provider of solutions that ensure customers receive optimal treatment at the right site of care by leveraging our team of medical professionals, evidence-based guidelines and innovative technologies to deliver affordable care.

eviCore provides integrated solutions for key clinical diagnostic areas such as advanced imaging, cardiology and gastroenterology, as well as longitudinal areas such as musculoskeletal, oncology and post-acute care.

eviCore contracts with health plans to promote the appropriate use of health care services by the customers they serve.

In certain instances, this occurs through capitated risk arrangements, when we assume the financial obligation for the cost of health care services provided to eligible customers covered by eviCore healthcare management programs.

MDLIVE virtual care services provide flexibility for the customer to access a network of virtual care providers for preventative and routine primary care and wellness, urgent care, dermatology care, behavioral health care needs and chronic condition management beginning with hypertension.

◦ Behavioral health .

We offer clinical programs to help our clients drive better whole-person health outcomes through our Care Delivery (virtual care, in-home care and physical primary care) and Care Management (eviCore benefits management, behavioral health services and health coaching capabilities) offerings.

◦ eviCore Healthcare .

eviCore Healthcare is a medical benefits management organization that promotes customers' optimal treatment at the right site of care by leveraging our team of medical professionals, evidence-based guidelines and innovative technologies to promote affordable care.

eviCore Healthcare provides integrated solutions for key clinical diagnostic areas such as advanced imaging, cardiology and gastroenterology, as well as longitudinal areas such as musculoskeletal, oncology and post-acute care.

eviCore Healthcare contracts with health plans to promote the appropriate use of health care services by the customers they serve.

◦ Evernorth Behavioral Health.

Our behavioral health solutions simplify the complicated treatment landscape by assisting members to the right level of care at the right time, in the right place - from start to finish.

Our predictive analytics models proactively identify customers who need support so that we can engage them early and provide the appropriate care, leveraging our extensive provider network including in-person providers, virtual providers and digital tools.

Our Evernorth inMynd Behavioral Health and inMyndRx solutions provide access to expert guidance and support for anxiety, depression, insomnia, ADHD, narcolepsy, Alzheimer's and select mood stabilizing medications.

These solutions include providing access to individualized support and educational resources, condition-specific care through our Neuroscience Therapeutic Resource Centers and digital Cognitive Behavioral Therapy program when applicable.

◦ Health Connect 360 .

This program is a transformational, outcomes-based, clinical management model that bridges pharmacy, medical, lab and biometric data to develop insights and deliver personalized health care clinical support.

Clinical outcomes and quality metrics are tailored to meet client needs.

◦ RationalMed .

RationalMed improves customer health and safety by integrating medical, pharmacy and laboratory claims data to initiate changes and correct errors in care, lowering both medical and prescription drug costs.

◦ Evernorth Digital Health Formulary .

Through the Evernorth Digital Health Formulary, we evaluate, procure, implement and manage digital health solutions on behalf of clients, alleviating administrative burden and ensuring clinical effectiveness, data security, user-friendly experiences and financial value.

◦ Cigna Pathwell Specialty .

Cigna Pathwell Specialty is designed to address one of our clients' top health care cost drivers - specialty drugs - enabling clients to reinvest in their employees, making health care more affordable.

This new solution controls specialty spending across the medical and pharmacy benefits by integrating pharmacy network and care coordination for customers who need our support the most.

◦ Evernorth Intelligence Solutions .

By bringing together world-class talent, multi-disciplinary expertise and advanced data and analytics, we unlock actionable insights to help drive greater affordability, simplicity, predictability and growth.

We work together with our clients and partners to create dynamic solutions, services and platforms that guide better decisions and improved performance (see "Business - Digital, Data and Technology" section of this Form 10-K for further information).

• Evernorth Labs.

We accelerate innovation through increased collaboration with clients, customers and partners to develop solutions for launch in their businesses.

With our Labs, which are state-of-the-art research facilities and shared spaces for collaboration, ideation and innovation, we gather with our clients and industry leaders to solve the toughest challenges in the health care system, including:

better managing the most complex and expensive disease states, such as oncology;

improving care access and delivery, such as worksite, home and virtual care;

and planning for emerging trends, such as artificial intelligence, and industry disruptors, such as COVID-19.

• Data, advanced analytics and platforms.

We use advanced predictive modeling to shape solutions that help decrease health care fragmentation, drive optimized care coordination, reduce key cost drivers and improve health outcomes.

In-depth trend analysis helps us to identify and effectively address challenges like opioid abuse, COVID-19 and other emerging health crises.

We use market surveillance and forecasting to pinpoint and proactively address cost drivers.

Our platform strategy as a service gives clients the tools to build successful businesses in a flexible, customizable way:

Trend Central provides access to key performance indicators to help plan sponsors reduce costs and work towards healthier outcomes;

HealthPredict produces high customer-level risk scores, to show the highest value opportunities for proactive intervention;

MediCUBE gives our academic detailing pharmacists the analytical power to identify ways to save plans from significant unnecessary spend and improve quality metrics;

and ScriptVision provides a suite of real-time, data-driven capabilities that empower physicians to make the best

prescribing choices, including ePrescribing (including controlled substances), real-time prescription benefit information, electronic prior authorizations, clinical care messages such as drug interactions and high-risk medication alerts and data on customer adherence rates.

◦ Evernorth Home-Based Care.

Our Evernorth Home-Based Care solution is a complete, in-home population health and clinical service business dedicated to serving the diverse needs of members, providers and customers, including in-home primary care, care coordination and enablement services.

We address common barriers to care faced by older Americans, including chronic conditions, limited mobility and transportation issues.

While most care in this model is home-based, our solution is digitally and virtually enabled for patients and their caregivers.

◦ Pharmacy Solutions.

These programs combine various solutions to coordinate care for customers and include:

inMynd, Condition and Disease Management, Navigation, Health Connect 360, RationalMed and Evernorth Digital Health Formulary.

Clients and Customers

We provide products and services in the Evernorth Health Services segment to clients and customers, as described below.

3 unchanged sentences

Prescription drugs are dispensed to patients connected to the service offerings we provide to clients.

Prescription drugs are dispensed primarily through networks of retail pharmacies under non-exclusive contracts with us and via home delivery from Express Scripts Pharmacy and specialty drug fulfillment pharmacies.

The Department of Defense ("DoD") TRICARE ® Pharmacy Program is the military health care program serving active-duty service customers, National Guard and Reserve customers and retirees, as well as their dependents.

Under this contract, we provide online claims adjudication, home delivery services, specialty pharmacy clinical services, claims processing and contact center support and other services critical to managing pharmacy trend.

In 2021, the DoD awarded Express Scripts a seven-year pharmacy program contract beginning January 1, 2023.

Under the new contract, Express Scripts will provide enhanced specialty care and expanded care coordination capabilities, while continuing to support current pharmacy operations, through 2029.

We provide online claims adjudication, home delivery services, specialty pharmacy clinical services, enhanced specialty care and care coordination capabilities, claims processing and contact center support and other services critical to managing pharmacy trend.

Our seven-year pharmacy program contract is through 2029.

Beginning March 1, 2024, the DoD has agreed to expand TRICARE Home Delivery to include specialty pharmacy services through Accredo.

Revenues from this contract are significant to the segment.

In 2019, Express Scripts and Prime Therapeutics LLC ("Prime") entered into an agreement effective on April 1, 2020 to deliver improved choice and affordability for Prime's clients and their customers by enhancing retail pharmacy networks and pharmaceutical manufacturer value.

In 2022, Prime and Express Scripts agreed to extend this relationship through 2025.

In 2021, the relationship with Prime was expanded to include the option for Prime's plans to access the Accredo specialty pharmacy and Express Scripts home delivery in-network pharmacies.

Express Scripts and Prime Therapeutics LLC ("Prime") have an agreement to deliver improved choice and affordability for Prime's clients and their customers by enhancing retail pharmacy networks and pharmaceutical manufacturer value through 2025.

The agreement was expanded to include the option for Prime's plans to access the Accredo specialty pharmacy and Express Scripts home delivery pharmacies through 2025.

Revenues from these contracts are significant to the segment.

In October 2022, Evernorth Health Services and Centene Corporation ("Centene") announced a multi-year agreement effective January 2024 to manage pharmacy benefit services and make prescription medications more accessible and affordable for Centene's approximately 20 million customers.

In addition to greater savings on prescription drugs, Centene customers will also have access to Express Scripts' extensive national network of retail pharmacies.

Effective January 1, 2024, Express Scripts and Centene Corporation ("Centene") have a multi-year agreement to manage pharmacy benefit services for Centene's approximately 20 million customers.

Centene customers will also have access to Express Scripts' extensive national network of retail pharmacies.

Revenues from these contracts are expected to be significant to the segment.

The health care industry has undergone periods of substantial consolidation and may continue to consolidate in the future.

4 unchanged sentences

negotiate discounts and rebates on prescription drugs with drug manufacturers;

specialize in claim adjudication and benefit administration;

navigate the complexities of government-reimbursed business including Medicare, Medicaid and the public exchanges;

1 unchanged sentence

and use the information we obtain about drug utilization patterns and consumer behavior to reduce costs for our clients and customers and assess the level of service we provide.

• Managed Care PBMs.

CVS Caremark (owned by CVS Health Corporation ("CVS")), Humana Inc.

("Humana"), IngenioRx (owned by Elevance Health Inc.

("Elevance")), OptumRx (owned by UnitedHealth Group Inc.

("UnitedHealth")) and Prime Therapeutics (owned by a collection of Blue Cross / Blue Shield Plans) compete with us on a variety of products and in various regions throughout the United States.

• Independent PBMs.

MedImpact, Navitus Health Solutions, Elixir (owned by Rite Aid Corporation) and many other regional PBMs compete with us on a variety of products across the United States.

• Pharmacies.

CVS, Walgreens Boots Alliance, Inc., WalMart, Inc., Rite Aid, Kroger and other independent pharmacies compete with us for the delivery of prescription drug needs to our customers.

In addition, many PBMs own and operate home delivery and specialty pharmacies including CVS, OptumRx, Walgreens, Humana and Elixir.

New entrants continue to emerge, including Amazon Pharmacy, Capsule and Hims.

• Third-Party Benefits Administrators.

Third parties that specialize in claim adjudication and benefit administration, such as SS&C Health, are direct competitors.

With the emergence of alternative benefit models through private exchanges, the competitive landscape also includes brokers, health plans and consultants.

Some of these competitors may deploy greater financial, marketing and technological resources than we do and new market entrants, including strategic alliances aimed at

modifying the current health care delivery models or entering the prescription drug sector from another sector of the health care industry, may increase competition as barriers to entry are relatively low.

For example, GoodRx is an entrant focused on serving the uninsured and underinsured in the cash pay pharmacy administration space.

• Care Delivery and Management Solutions.

OptumHealth, NaviHealth and Landmark (UnitedHealth);

Beacon, Aspire and CareMore (owned by Elevance);

CVS's HealthHubs and MinuteClinics;

CenterWell Home Health (Humana);

Community and Bayless (Centene);

VillageMD, Teladoc, Doctor on Demand, MeMD, WalmartHealth and AmazonCare are among the companies that compete with us in this market.

• Clinical Solutions and Health Care Data Analytics Companies.

Optum (owned by UnitedHealth), Elevance, Magellan Health and Apixio (owned by Centene Corporation), HealthHelp, Cotiviti and Inovalon are among the companies that compete with us in this market.

• Sales and Account Management.

Our sales and account management teams market and sell pharmacy benefit management solutions and are supported by client service representatives, clinical pharmacy managers and benefit analysis consultants.

These teams work with clients to develop innovative strategies that put medicine within reach of customers while helping health benefit providers improve access to and affordability of prescription drugs.

• Supply Chain.

Our supply chain contracting and strategy teams negotiate and manage pharmacy retail network contracts, pharmaceutical and wholesaler purchasing contracts and manufacturer rebate contracts.

As our clients continue to experience increased cost trends, our supply chain teams develop innovative solutions such as our Express Scripts SafeGuardRx platform and preferred pharmacy networks to combat these cost increases.

In addition, our Formulary Consulting team, consisting of pharmacists and financial analysts, provides services to our clients to support formulary decisions, benefit design consultation and utilization management programs.

• Clinical Support.

Our staff of highly trained health care professionals provides clinical support for our pharmacy, medical and behavioral customers.

Our services include access to:

◦ Support for the individual and their caregivers from crisis care in their most vulnerable moments to stabilization and returning back to work and life for all involved

◦ Comprehensive behavioral health offerings including network access, utilization management and coordination of care to treat conditions ranging from depression and anxiety to substance use, autism and eating disorders

◦ Condition-specific specialized customer care through our Therapeutic Resource Center facilities staffed with specialist pharmacists, nurses and other clinicians

◦ Clinical development and operational support for our pharmacy benefit management services by our clinical solutions staff of pharmacists and physicians who conduct a wide range of activities including:

identifying emerging medication-related safety issues and alerting physicians, clients and customers (as appropriate);

providing drug information services;

managing formulary;

identifying and closing gaps in care;

and developing utilization management, safety (drug utilization review) and other clinical interventions

We maintain an inventory of brand-name and generic pharmaceuticals in our home delivery and specialty pharmacies.

Our specialty pharmacies also carry biopharmaceutical products to meet the needs of our customers, including pharmaceuticals for the treatment of rare or chronic diseases;

We believe our focus on improving the health and vitality of those we serve will allow us to further differentiate ourselves from our primary competitors shown in the chart above.

We maintain an inventory of brand-name and generic pharmaceuticals in our home delivery pharmacies, specialty pharmacies and specialty distributor.

Our specialty pharmacies and specialty distributor also carry biopharmaceutical products to meet the needs of our customers, including pharmaceuticals for the treatment of rare or chronic diseases;

if a drug is not in our inventory, we can generally obtain it from a supplier within a reasonable amount of time.

We purchase pharmaceuticals either directly from manufacturers or through authorized wholesalers.

Evernorth Health Services uses one wholesaler more than others in the industry, but holds contracts with other wholesalers if needs for an alternate source arise.

Evernorth Health Services uses one wholesaler for approximately half of our pharmaceutical purchases, but holds contracts with other wholesalers if needs for an alternate source arise.

Generic pharmaceuticals are generally purchased directly from manufacturers.

Growth Strategy

Evernorth Heath Services' strategy is to continue to create value for our clients by leveraging innovation from across our business and assets to drive affordability, while improving access, service and quality.

We relentlessly innovate to make the prediction, prevention and treatment of disease more accessible to millions of people.

Our growth platform includes our foundational businesses of Pharmacy Benefits and Home Delivery Pharmacy and our accelerated growth businesses of Specialty Pharmacy, Specialty Distribution and Care Delivery and Management Solutions.

As we look to 2024, we will leverage our strong foundation and continue to capitalize on opportunities including:

expanding our markets by evolving our

service offerings to meet changing customer demands, including focusing on our Care Solutions businesses;

increasing transparency and predictability;

delivering on biosimilar opportunities;

driving improved enterprise affordability initiatives value;

investing in our business, infrastructure and people to drive enterprise growth;

and continuing to build on our new relationship with Centene.

Cross-enterprise Leverage with Cigna Healthcare .

Evernorth Health Services' offerings continue to be cross-leveraged within Cigna Healthcare solutions, helping broaden our presence in the total health care delivery system, further reducing the total cost of care for clients and customers.

See "Cross-enterprise Leverage" section within Item 1.

Business - Overview for further information.

Key Transactions and Business Developments

2 unchanged sentences

Cigna Healthcare includes the U.S.

Commercial, U.S.

Government and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.

Healthcare and International Health operating segments, which provide comprehensive medical plan services and coordinated solutions to clients and customers.

During the fourth quarter of 2023, the U.S.

Commercial and U.S.

Government operating segments merged to form the U.S.

Healthcare operating segment.

Within Cigna Healthcare, U.S.

Commercial and International Health are our foundational growth businesses and U.S.

Government is our accelerated growth business.

Employer and International Health are foundational growth businesses.

In 2023, Cigna Healthcare reported adjusted revenues of $51.2 billion and pre-tax adjusted income from operations of $4.5 billion.

Healthcare operating segment to HCSC for $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions.

How We Deliver

• Clinical programs to support the highest-quality health outcomes and customer experiences.

1 unchanged sentence

• Differentiated approach to understanding clients and responding to evolving workforce needs to improve employee productivity and drive more consistent performance.

• Innovative coordinated benefit solutions that deliver value for our customers, clients and partners

• Technology and data analytics powering actionable insights and promoting solutions to improve health and vitality with greater precision and personalization.

• Talented, experienced and caring people who work as consultative partners in aligning client and customer needs to our solutions and putting those we serve at the center of all we do

By offering a mix of services and medical insurance products to employers, groups and individuals along with specialty products, we improve the quality of care, lower costs and help customers achieve better health outcomes.

Many of these products are available on a standalone basis, but we believe they create additional value and savings when integrated with a Cigna Healthcare-administered health plan.

• Innovative integrated benefit solutions that deliver value for our customers, clients and partners.

• Talented, experienced and caring team members who work as consultative partners in aligning client and customer needs to our solutions and putting those we serve at the center of all we do.

We offer a mix of administrative services only and medical insurance solutions to employers, groups and individuals along with specialty benefits and solutions to improve the quality of care, lower costs and help customers achieve better health outcomes.

Many of these solutions are available on a stand-alone basis, but we believe additional value and savings are created when they are integrated with a Cigna Healthcare-administered health plan.

The following chart depicts a high-level summary of our principal products and services in this segment, with definitions on subsequent pages.

Principal Products & Services Major Brand(s) Geography Funding Solution(s) (1)

Market Segment(s) Primary Distribution Channel(s) Primary Competitors

Commercial Medical

Managed Care Cigna Healthcare Nationwide GC, ER, ASO U.S.

Brokers, Private Exchanges, Direct National Insurers, Local Healthplans, Third-Party Administrators ("TPAs")

Preferred Provider Organization ("PPO") National Insurers, Local Healthplans, TPAs

Consumer-Driven National Insurers, Local Healthplans

Government Medical

Primary Distribution Channel(s) Primary Competitors

Healthcare Plans

Employer Medical Plans (including Consumer-Driven Products) Cigna Healthcare Nationwide ASO, GC, ER Brokers, Private Exchanges, Direct National Insurers, Local Healthplans, Third-Party Administrators ("TPAs")

Individual and Family Plans Cigna Healthcare 14 states (2)

Public Exchanges, Brokers, Direct National Insurers,

Local Healthplans, Provider-led Plans

Medicare Advantage Cigna Healthcare 29 states (3) & District of Columbia

GC Public Exchanges, Brokers, Direct National Insurers,

Local Healthplans,

Provider-led Plans

Medicare Advantage Plans Cigna Healthcare 30 states (3) & District of Columbia

GC Direct, Brokers National Insurers,

1 unchanged sentence

Provider-led Plans

Medicare Stand –Alone Prescription Drug Plans Cigna Healthcare, Express Scripts Nationwide GC, ASO Direct, Brokers National Insurers

Medicare Supplement Cigna Healthcare 48 states (4) & District of Columbia

Medicare Stand-Alone Prescription Drug Plans Cigna Healthcare, Express Scripts Nationwide ASO, GC Direct, Brokers National Insurers

Medicare Supplement Plans Cigna Healthcare 48 states (4) & District of Columbia

GC Brokers, Direct, Private Exchanges National Insurers

Specialty Products and Services

Stop-Loss Cigna Healthcare Nationwide GC U.S.

Brokers, Direct National Insurers, Specialty Companies

Cost Containment Cigna Healthcare GC, ER, ASO U.S.

National Insurers, Specialty Companies

Consumer Health Engagement Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

National Insurers, Specialty Companies

Pharmacy Management Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

Independent PBMs, Managed Care PBMs

Behavioral Health Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

National Insurers, Specialty Companies

Dental Cigna Dental Care®

GC, ER, ASO U.S.

Commercial, U.S.

Dental Insurers, National Insurers

Healthcare Specialty Benefits and Solutions

Behavioral Health Cigna Healthcare Nationwide ASO, GC, ER Brokers, Direct National Insurers,

Specialty Companies

Consumer Health Engagement Cigna Healthcare ASO, GC, ER National Insurers,

Specialty Companies

Cost Containment Cigna Healthcare ASO, GC, ER National Insurers,

Specialty Companies

Dental Cigna Dental Care® ASO, GC, ER Dental Insurers,

National Insurers

Pharmacy Management Cigna Healthcare ASO, GC, ER Independent PBMs,

Managed Care PBMs

Stop-Loss Cigna Healthcare GC National Insurers,

Specialty Companies

(1) ( Our three funding solutions include administrative services only ("ASO"), insured - guaranteed cost ("GC") and insured - experience-rated ("ER") arrangements.

(2) AZ, CO, FL, GA, IL, KS, MO, MS, NC, PA, TN, UT & VA.

Effective January 1, 2023, also includes IN, SC & TX.

(3) AL, AR, AZ, CO, CT, DE, FL, GA, IL, KS, MD, MO, MS, NC, NJ, NM, OH, OK, OR, PA, SC, TN, TX, UT, VA, VT & WA.

Effective January 1, 2023, also includes KY & NY.

(2) ( AZ, CO, FL, GA, IL, IN, MS, NC, PA, SC, TN, TX, UT & VA.

(3) AL, AR, AZ, CO, CT, DE, FL, GA, IL, KS, KY, MD, MO, MS, NC, NJ, NM, NY, OH, OK, OR, PA, SC, TN, TX, UT, VA, VT & WA.

Effective January 1, 2024, also includes NV.

(4) All states except MA & NY.

Principal Products & Services Major Brand(s) Geography Funding Solution(s) Market Segment(s) Primary Distribution Channel(s) Primary Competitors

Principal Products & Services Major Brand(s) Geography Funding Solution(s) Primary Distribution Channel(s) Primary Competitors

International Health Products and Services

Global Health Care Cigna Global Health Benefits, Cigna Global Individual Health Worldwide (except as limited by applicable law) GC, ER, ASO International Health

Brokers, Direct Global insurers

Local Health Care Cigna Healthcare, ManipalCigna, CignaCMB China, Middle East, Singapore, Hong Kong, Spain, United Kingdom, India Global insurers and local non-U.S.

Global Health Care Cigna Global Health Benefits, Cigna Global Individual Health Worldwide (except as limited by applicable law) ASO, GC, ER Brokers, Direct Global insurers

Local Health Care Cigna Healthcare, ManipalCigna, CignaCMB China, Middle East, Singapore, Hong Kong, Spain, India Global insurers and local non-U.S.

Principal Products & Services

Commercial Medical

• Managed Care Plans are offered through our insurance companies, Health Maintenance Organizations ("HMOs") and TPA companies.

HMO, LocalPlus®, Network and Open Access Plus plans use meaningful cost-sharing incentives to encourage the use of "in-network" versus "out-of-network" health care providers.

The national provider network for Managed Care Plans is smaller than the national network used with the PPO plan product line.

• PPO Plans feature a network with broader provider access than the Managed Care Plans.

• Consumer-Driven Products are typically paired with a high-deductible medical plan and offer customers a tax-advantaged way to pay for eligible health care expenses.

Healthcare Plans

• Employer Medical Plans include Health Maintenance Organizations ("HMOs"), LocalPlus®, Network and Open Access Plus, and are offered through our insurance companies, HMOs and TPAs.

These plans use cost-sharing incentives to encourage the use of "in-network" rather than "out-of-network" health care providers.

In addition, Preferred Provider Organization ("PPO") plan offerings feature broader provider access than the other plans, do not require referrals and typically have a higher cost share if a customer seeks care with an out-of-network provider.

◦ Consumer-Driven Products are paired with employer medical plans and offer customers a tax-advantaged way to pay for eligible health care expenses.

These products, consisting of health savings accounts, health reimbursement accounts and flexible spending accounts, encourage customers to play an active role in managing their health and health care costs.

Government Medical

• Individual and Family Plans are Patient Protection and Affordable Care Act ("ACA") compliant exclusive provider organization ("EPO") or HMO plans marketed to individuals under age 65 who do not have access to health care coverage through an employer or government program such as Medicare or Medicaid.

• Individual and Family Plans are Patient Protection and Affordable Care Act ("ACA") compliant exclusive provider organizations ("EPO") or HMO plans marketed to individuals under age 65 who do not have access to health care coverage through an employer or government program such as Medicare or Medicaid.

Customers receive comprehensive health care benefits and have access to a local network of health care providers who have been selected with cost and quality in mind.

• Medicare Advantage Plans allow Medicare-eligible customers to receive health care benefits, including prescription drugs, through a managed care health plan such as our coordinated care plans.

Our Medicare Advantage Plans include HMO and PPO plans marketed to individuals and qualified employer groups.

Held for Sale

• Medicare Advantage Plans allow Medicare-eligible customers to receive health care benefits, including prescription drugs, through a managed care health plan.

Our plans include HMO and PPO plans marketed to individuals and qualified employer groups.

A significant portion of our Medicare Advantage customers receive medical care from our value-based models that focus on developing highly-engaged physician networks, aligning payment incentives to improve health outcomes and using timely and transparent data sharing.

• Medicare Stand-Alone Prescription Drug ("Part D") Products provide a number of prescription drug plan options, as well as service and information support to Medicare-eligible individuals or individuals through a qualified employer group.

• Medicare Stand-Alone Prescription Drug ("Part D") Plans provide a number of prescription drug plan options, as well as service and information support to Medicare-eligible individuals or individuals through a qualified employer group waiver plan.

Our stand-alone plans offer the coverage of Medicare combined with the flexibility to select a product that provides enhanced benefits and a formulary that aligns with the individual's needs.

Eligible customers benefit from broad network access and enhanced service intended to promote adherence, wellness and affordability.

• Medicare Supplement Plans provide Medicare-eligible customers with federally standardized Medigap-style plans.

Customers may select among the various plans with specific plan options to meet their unique needs and may visit, without the need for a referral, any health care provider or facility that accepts Medicare throughout the United States.

Specialty Products and Services

• Stop-Loss insurance coverage is offered to self-insured clients whose group health plans are administered by Cigna Healthcare.

Stop-loss insurance provides reimbursement for claims in excess of a predetermined amount for individuals, the entire group, or both.

Eligible customers benefit from broad network access and enhanced service intended to promote adherence to treatment plans, wellness and affordability.

• Medicare Supplement Plans provide Medicare-eligible customers with federally standardized Medigap plans.

Customers may select among the various plans to meet their unique needs and may visit any health care provider or facility that accepts Medicare throughout the United States without the need for a referral.

Healthcare Specialty Benefits and Solutions

• Behavioral Health solutions consist of a broad national network of behavioral health providers that includes one of the largest virtual networks in the United States, behavioral health specialty case and utilization management, a crisis intervention phone line accessible anytime, employee assistance programs and work/life programs.

We integrate our programs and solutions with medical and pharmacy programs to facilitate customized, holistic care as well as to provide resources that increase resiliency and address non-medical factors that affect the overall well-being of our customers.

• Consumer Health Engagement solutions are offered to customers covered under plans administered by Cigna Healthcare or by third-party administrators and consist of an array of health management, disease management and wellness programs.

Our Medical Management programs include case, specialty and utilization management and a 24/7 Health Information phone line which ensures around-the-clock access to a medical professional.

Our Health Advocacy program includes early intervention in the treatment of chronic conditions and an array of health and wellness coaching.

We administer incentives programs designed to encourage customers to engage in health improvement activities.

• Cost Containment Programs are designed to contain the cost of covered health care services and supplies.

These programs reduce out-of-network utilization and costs, protect customers from balance billing and educate customers regarding the availability of lower cost in-network services.

In addition, under these programs we negotiate discounts with out-of-network providers, review provider bills and recover overpayments.

In addition, we negotiate discounts with out-of-network providers, review provider bills and recover overpayments.

We charge fees for providing or arranging for these services.

These programs may be administered by third-party vendors that have contracted with Cigna Healthcare.

• Consumer Health Engagement services are offered to customers covered under plans administered by Cigna Healthcare or by third-party administrators.

These services consist of an array of health management, disease management and wellness services.

Our Medical Management programs include case, specialty and utilization management and a 24/7 Health Information line which ensures around the clock access to a medical professional.

Our Health Advocacy program services include early intervention in the treatment of chronic conditions and an array of health and wellness coaching.

We administer incentives programs designed to encourage customers to engage in health improvement activities.

• Pharmacy Management services and benefits can be combined with our medical offerings.

The comprehensive suite of pharmacy management services are available to clients and customers through our integration with Evernorth Health Services' capabilities.

• Behavioral Health services consist of a broad national network of behavioral health providers which includes one of the largest virtual networks in the United States, behavioral health specialty case and utilization management, a crisis intervention line accessible anytime, employee assistance programs and work/life programs.

We integrate our programs and services with medical and pharmacy programs to facilitate customized, holistic care as well as to provide resources that increase resiliency and address non-medical factors that affect overall well-being.

• Dental solutions include dental HMO plans, dental PPO plans, exclusive dental provider organization plans, traditional dental indemnity plans and a dental discount program.

Employers and other groups can purchase our products on either an insured or self-insured basis as standalone products or in conjunction with medical products.

Additionally, individual customers can purchase insured dental PPO plans as standalone products or in conjunction with individual medical policies.

• Dental solutions include HMO plans, PPO plans, exclusive provider organization plans, traditional indemnity plans and a discount program.

Employers and other groups may purchase our products on either an insured or self-insured basis and as stand-alone products or in conjunction with medical products.

Additionally, individual customers may purchase insured dental PPO plans as stand-alone products or in conjunction with individual medical policies.

• Pharmacy Management solutions and benefits may be combined with our medical and behavioral health offerings.

We offer a comprehensive suite of pharmacy management products and services to our clients and customers, leveraging the capabilities of Evernorth Health Services.

• Stop-Loss insurance coverage is offered to self-insured clients whose group health plans are administered by Cigna Healthcare.

Stop-loss insurance provides reimbursement for claims in excess of a predetermined amount for individuals, the entire group, or both.

International Health

• Global Health Care products and services include insurance and administrative services for medical, dental, pharmacy, vision and life, accidental death and dismemberment and disability risks.

• Global Health Care offerings include insurance and administrative services for medical, dental, pharmacy, vision and life, accidental death and dismemberment and disability risks.

We are a leading provider of products and services that meet the needs of multinational employers, intergovernmental and nongovernmental organizations and globally mobile individuals with a focus on keeping employees healthy and productive.

The employer benefits products and services are offered through guaranteed cost, experience-rated and administrative services only funding solutions, while individuals purchase guaranteed cost coverage.

• Local Health Care products and services include medical, dental, pharmacy and vision as well as life coverage.

The customers of local health care businesses are employers and individuals located in specific countries where the products and services are purchased.

These employer services can similarly be funded through a range of options;

individuals purchase on a guaranteed cost basis.

• Local Health Care offerings include medical, dental, pharmacy and vision as well as life coverage.

Customers include employers and individuals located in specific countries where the products and services are purchased.

Premiums and Fees

Plan sponsors (i.e., employers, unions and other groups) self-fund all claims, but may purchase stop-loss insurance to limit exposure.

We collect fees from plan sponsors for providing access to our participating provider network and for other services and programs including:

claims administration;

behavioral health services;

disease management;

utilization management;

cost containment;

dental and pharmacy benefit management.

Plan sponsors (i.e., employers, unions and other groups) create self-funded group health plans to fund all claims, but may purchase stop-loss insurance to limit exposure.

We collect fees from ASO clients for providing access to our participating provider networks and for solutions supporting cost-effective benefit management including:

claims administration, behavioral health solutions, disease management, utilization management, cost containment, and dental and pharmacy benefit management.

Approximately 76% of our U.S.

Commercial medical customers are in ASO arrangements.

Healthcare medical customers are in ASO arrangements.

In most states, individual and group insurance premium rates must be approved by the applicable state regulatory agency (typically a department of insurance).

1 unchanged sentence

Premium rates are established at the beginning of a policy period and, depending on group size, may be based in whole or in part on prior experience of the policyholder or on a pool of similar policyholders.

With the exception of ER policies, we generally cannot subsequently adjust premiums to reflect actual claim experience until the next policy period;

the policyholder does not participate, or share in, actual claim experience;

and we keep any experience surplus or margin if costs are less than the premium charged (subject to minimum medical loss ratio rebate requirements discussed below).

With the exception of ER policies, we generally cannot adjust premium rates to reflect actual claim experience until the next policy period;

the policyholder does not participate, or share in, actual claim experience, and we retain any surplus or margin if costs are less than the premium charged (subject to minimum medical loss ratio ("MLR") rebate requirements discussed below).

For all insured arrangements, we bear the risk for actual costs in excess of the premium charged.

Approximately 24% of our U.S.

Commercial medical customers are in insured arrangements.

Healthcare medical customers are in insured arrangements.

For Medicare Advantage plans, we receive fixed monthly payments from CMS for each plan customer based on customer demographic data and actual customer health risk factors compared to the broader Medicare population.

2 unchanged sentences

The ACA subjects individual and small group policy rate increases above an identified threshold to review by the United States Department of Health and Human Services ("HHS").

Commercial and U.S.

Government medical plans are subject to minimum medical loss ratio ("MLR") requirements.

The MLR represents the percentage of premiums used to pay

claims and expenses for activities that improve the quality of care.

Healthcare medical plans are subject to minimum MLR requirements.

The MLR represents the percentage of premiums used to pay claims and expenses for activities that improve the quality of care.

If we do not satisfy the prescribed MLR, statutes require premium refunds to policyholders or to CMS.

1 unchanged sentence

Market Segments

Commercial comprises the following market segments:

Healthcare comprises the following market segments:

Employers with 3,000 or more eligible employees, primarily through ASO funding solutions.

2 unchanged sentences

Employers generally with 51 to 499 eligible employees, primarily through ASO with stop-loss insurance coverage and insured funding solutions.

◦ Small Group.

Employers generally with 2 to 50 eligible employees.

We offer guaranteed cost insured funding solutions in select geographies with our Cigna + Oscar product.

Government comprises the following market segments:

◦ Individual.

Includes individuals under age 65 who do not have access to health care coverage through an employer or government program such as Medicare or Medicaid.

We offer guaranteed cost, medical ACA-compliant and dental plans in this market segment.

We offer GC funding solutions in select geographies with our Cigna + Oscar product.

◦ Individual and Family Plans.

Includes GC, medical ACA-compliant plans on and off the public exchanges for individuals primarily under age 65 who do not have access to health care coverage through an employer or government program such as Medicare or Medicaid.

We also offer individual dental plans to customers of all ages across various distribution channels.

◦ Medicare Advantage.

Includes individuals who are Medicare-eligible customers, as well as employer group sponsored post-65 retirees.

1 unchanged sentence

Revenues from CMS are significant to the market segment.

• International Health comprises market segments offering international plans to multinational employers and globally mobile individuals, and domestic plans to employers and individuals in specific countries outside of the U.S.

Employer plans in the International Health segment may be ASO or fully insured plans.

We provide clients and customers with access to a mix of medical and specialty products and services.

Our clients include employers, third-party administrators, union-sponsored benefit plans, government health programs and other groups which span our operating segments.

Clients and Customers

We provide clients and customers with access to a mix of medical and specialty benefits and solutions.

Our clients include employers, third-party administrators, union-sponsored benefit plans, government health programs and other groups.

Our customers include individuals who access our offerings through an employer-sponsored plan, government-sponsored plan, or other insured group.

Primary Distribution Channels

Sales representatives distribute our products and services to a broad group of insurance brokers and consultants.

Cigna Healthcare sales representatives distribute our products and services directly to employers, unions and other groups or individuals.

Sales representatives distribute our products and solutions to a broad group of insurance brokers and consultants.

Cigna Healthcare sales representatives distribute our products and solutions directly to employers, unions and other groups or individuals.

Various products may also be sold directly to insurance companies, HMOs and third-party administrators.

5 unchanged sentences

Cigna Healthcare offers individual ACA-compliant policies through public health insurance exchanges in select geographies.

The primary competitive factors affecting our business are quality of care and cost effectiveness of service and provider networks;

effectiveness of medical care management;

products that meet the needs of employers and their employees;

total cost management;

technology and effectiveness of marketing and sales.

The primary competitive factors affecting our business are quality of care and cost effectiveness of service and provider networks, effectiveness of medical care management, products that meet the needs of employers and their employees, total cost management, technology and effectiveness of marketing and sales.

Financial strength, as indicated by ratings issued by nationally recognized rating agencies, is also a competitive factor.

Our health advocacy capabilities, holistic approach to consumer engagement, breadth of product offerings, clinical care and health management capabilities along with an array of product funding solutions are competitive

We believe our focus on improving the health and vitality of those we serve will allow us to further differentiate ourselves.

• National Insurers.

UnitedHealth, Aetna Inc.

(owned by CVS), Elevance, Humana and Blue Cross Blue Shield plans compete with us in a variety of products and regions.

• Local Healthplans.

Blue Cross Blue Shield plans, local affiliates of major insurance companies and hospitals and regional stand-alone managed care and specialty companies compete with us in the states in which we offer managed care products.

Third-party administrators compete with us for ASO business.

• Provider-led Plans.

Include health systems and hospitals who integrate health plan offerings with care delivery.

Additionally, plan sponsors may contract directly with providers.

• Dental Insurers.

Various companies offering primarily dental insurance compete with us on these products.

• Specialty Companies.

Specialty insurance or service companies that offer niche products and services compete with us.

• International Companies.

Global insurers and local non-U.S.

insurers compete with us through product and service offerings.

Partnering to Advance our Growth Strategy

Cigna Healthcare's strategy engages customers in their health, collaborates with providers to help them improve their performance and connects customers and providers through aligned health goals, incentives and actionable information to help enable informed decisions and drive better outcomes.

Continuing to expand the breadth and depth of Evernorth Health Services care services, pharmacy services and benefits management will further reduce the total cost of care for our clients and customers.

Fueled by advanced insights and predictive analytics, Cigna Healthcare continues to develop innovative solutions that span the health care delivery system and can be applied to a multitude of providers.

We believe our focus on improving the health and vitality of those we serve will allow us to further differentiate ourselves from our primary competitors shown in the chart above.

Growth Strategy

Cigna Healthcare's strategy is to engage customers in their health, partner with providers to help them improve their performance and connect customers and providers through aligned health goals, incentives and actionable information.

This enables informed decisions and drives better outcomes.

Fueled by advanced insights and predictive analytics, Cigna Healthcare continues to develop targeted, innovative solutions that span the health care delivery system and can be applied to a multitude of providers.

2024 priorities include continued development of integrated, digital-first, data-driven programs and capabilities to drive affordability and improve clinical outcomes by promoting the highest value care choices to our customer base while improving customer experience.

Arrangements enabling Cigna Healthcare to deliver growth and cross-enterprise leverage to the enterprise are described below.

Participating provider network.

We provide our customers with an extensive national network of participating health care providers, hospitals and other facilities, pharmacies and providers of health care services and supplies.

In addition, we have strategic alliances with several regional managed care organizations to gain access to their provider networks and discounts.

Provider partnerships.

We enter into a variety of provider partnerships to continuously improve the quality of care for those we serve.

• Accountable Care Program.

We have approximately 239 collaborative care arrangements with primary care groups built on the patient-centered medical home and accountable care organization ("ACO") models.

Program flexibility allowed adjustments in response to the COVID-19 pandemic designed to maintain appropriate focus on high-risk individuals and populations with chronic conditions impacted by Social Determinants of Health.

As we emerge from the pandemic, we are leveraging new models to increase provider adoption of upside and downside risk sharing to drive better health outcomes and lower the total cost of care.

• Hospital Quality Program.

We have contracts with approximately 152 hospital systems, involving over 592 hospitals, with reimbursements tied to quality metrics.

• Site of Care Redirection.

We encourage the use of clinically appropriate settings to reduce the cost of care.

This results in significant cost savings compared to receiving the same care in a hospital setting, while ensuring high quality care and service.

We have more than 200 collaborative care arrangements with primary care groups and have been a pioneer in the transition from fee-for-service to value-based payment arrangements with providers.

Our flagship program is the Cigna Collaborative Accountable Care program ("CAC").

The program rewards providers for improving

quality outcomes as well as improving medical cost performance.

The quality model also includes elements related to health disparities and social determinants of health.

• Specialist Programs.

We have approximately 266 arrangements with specialist groups in value-based reimbursement arrangements across six different disciplines.

We have more than 100 arrangements with specialist groups in value-based reimbursement arrangements across six different disciplines.

Arrangements include incentives for enhanced care coordination and episodes of care reimbursements for meeting cost and quality goals.

We have expanded these programs to include prospective bundled payment arrangements beginning with orthopedics.

These programs include prospective bundled payment arrangements beginning with orthopedics.

• Hospital Quality Program.

We have contracts with more than 200 hospital systems, involving more than 800 hospitals, with reimbursements tied to quality metrics.

• Independent Practice Associations.

1 unchanged sentence

This clinical model also includes outreach to new and at-risk patients to ensure they are accessing their primary care physician.

• Participating Provider Network.

We provide our customers with an extensive network of participating health care providers, hospitals and other facilities, pharmacies and providers of health care services and supplies.

In addition, we have strategic alliances with several regional managed care organizations to gain access to their provider networks and discounts.

• Virtual Care.

We encourage access for customers through MDLIVE telehealth services as a way to support the patient/provider relationship.

MDLIVE telehealth services provide flexibility for the customer to access a network of telehealth providers for services including preventative and routine primary care and wellness, urgent care, dermatology care, behavioral health care needs and chronic condition management beginning with hypertension.

Site of care optimization.

We encourage the use of clinically appropriate settings to reduce the cost of care through our clinical programs and partnership with eviCore.

This results in significant cost savings while ensuring high quality care and service.

Additionally, we provide access to MDLIVE virtual care services as a way to reduce the cost of care while supporting the patient/provider relationship, and we provide flexibility for customers to access MDLIVE’s network of virtual care providers for preventative and routine primary care and wellness, urgent care, dermatology care, behavioral health care needs and chronic condition management.

Cross-enterprise leverage with Evernorth Health Services.

We continue to expand the breadth and depth of the Evernorth Health Services pharmacy benefit services and specialty and care services available to Cigna Healthcare clients and customers to deliver value by improving affordability, access, quality of care, care innovations and transparency.

See "Cross-enterprise Leverage" section within Item 1.

Business - Overview for further information.

Key Transactions and Business Developments

1 unchanged sentence

OTHER OPERATIONS

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exiting businesses.

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exited businesses.

Our ongoing businesses include our continuing business, COLI, as described below, as well as our run-off businesses.

Our run-off businesses include (i) GMDB and GMIB business that were effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013, (ii) settlement annuity business, and (iii) individual life insurance and annuity and retirement benefits businesses comprised of deferred gains from the sales of these businesses.

Our exiting businesses include our interest in a joint venture in Türkiye, which was sold to our partner in December 2022, the international life, accident and supplemental benefits businesses sold on July 1, 2022, and the Group Disability and Life business sold on December 31, 2020.

Our run-off businesses include (i) variable annuity reinsurance business (formerly referred to as GMDB and GMIB business) that were effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska in 2013, (ii) settlement annuity business, and (iii) individual life insurance and annuity and retirement benefits businesses which were sold through reinsurance agreements.

Our exited businesses include the international life, accident and supplemental benefits businesses sold in July 2022 and our interest in a joint venture in Türkiye sold in December 2022.

In 2023, Other Operations reported adjusted revenues of $0.6 billion and pre-tax adjusted income from operations of $96 million.

Other Operations was previously named Group Disability and Other.

Ongoing Businesses

13 unchanged sentences

Our reinsurance operations are an inactive business in run-off.

In February 2013, we effectively exited the GMDB and GMIB business by reinsuring 100% of our future exposures, net of retrocessional arrangements in place at that time, up to a specified limit.

In February 2013, we effectively exited the variable annuity reinsurance business (formerly referred to as GMDB and GMIB business) by reinsuring 100% of our future exposures, net of retrocessional arrangements in place at that time, up to a specified limit.

For additional information regarding this reinsurance transaction and the arrangements that secure our reinsurance recoverables, see Note 11 to the Consolidated Financial Statements.

Individual Life Insurance and Annuity and Retirement Benefits Businesses

This business includes deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business.

The individual life insurance and annuity business and the retirement benefits business were sold through reinsurance agreements in 1998 and 2004, respectively.

For more information regarding the arrangements that secure our reinsurance recoverables for the retirement benefits business, see Note 11 to the Consolidated Financial Statements.

Exiting Businesses

Our Interest in a Joint Venture in Türkiye

In December 2022, we divested our ownership interest in Cigna Sağlık Hayat ve Emeklilik, our joint venture in Türkiye, to our long-time partner QNB Finansbank.

International Life Accident and Supplemental Benefits

We offered life, accident and supplemental benefits insurance products and services in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand until the completion of the sale of these businesses on July 1, 2022 to Chubb as described in the "Overview" section of this Form 10-K.

Exited Businesses

International Life Accident and Supplemental Benefits and Our Interest in a Joint Venture in Türkiye

We offered life, accident and supplemental benefits insurance products and services in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand until completion of the sale of these businesses in July 2022 to Chubb INA Holdings, Inc.

South Korea represented our single largest geographic market for these businesses.

Group Disability and Life

Our Group Disability and Life operating segment included our commercial long-term and short-term disability products and our term life group insurance products, until completion of the sale in 2020.

We also offered personal accident insurance and will continue to offer voluntary products and services that were not part of the sale.

Beginning in 2021, voluntary products and services are reported in the Cigna Healthcare segment.

In December 2022, we divested our ownership interest in Cigna Sağlık Hayat ve Emeklilik, our joint venture in Türkiye, to our long-time partner QNB Finansbank.

MISCELLANEOUS

• Revenues from U.S.

Federal Government agencies, under a number of contracts, represented 15% of our consolidated revenues in 2023 and 14% in both 2022 and 2021.

• The Company does not rely on business from one or a few brokers or agents.

INVESTMENT MANAGEMENT

Our investment operations provide investment management and related services for our various businesses, including the insurance-related invested assets in our General Account ("General Account Invested Assets").

We acquire or originate, directly or through intermediaries, a broad range of investments, including private placement and public securities, commercial mortgage loans, real estate, mezzanine, private equity partnerships and short-term investments.

We acquire or originate, directly or through intermediaries, a broad range of investments, including private placement and public securities, commercial mortgage loans, real estate, mezzanine debt, private equity partnerships and short-term investments.

Invested assets also include policy loans that are fully collateralized by insurance policy cash values.

5 unchanged sentences

We manage our investment portfolios to reflect the underlying characteristics of related insurance and contractholder liabilities and capital requirements, as well as regulatory and tax considerations pertaining to those liabilities and state investment laws.

Insurance and contractholder liabilities range from short duration health care products to longer-term obligations associated with life insurance products and the run-off settlement annuity business.

Insurance and contractholder liabilities range from short-duration health care products to longer-term obligations associated with corporate-owned life insurance products and the run-off settlement annuity business.

Assets supporting these liabilities are managed in segregated investment portfolios to facilitate matching of asset durations and cash flows to those of corresponding liabilities.

Investment results are affected by the amount and timing of cash available for investment, economic and market conditions and asset allocation decisions.

We routinely monitor and evaluate the status of our investments, obtaining and analyzing relevant investment-specific information and assessing current economic conditions, trends in capital markets and other factors such as industry sector, geographic and property-specific information.

We routinely monitor and evaluate the status of our investments, obtaining and analyzing relevant investment-

specific information and assessing current economic conditions, trends in capital markets and other factors such as industry sector, geographic and property-specific information.

Separate Accounts

Our subsidiaries or external advisors manage invested assets of separate accounts on behalf of contractholders, including The Cigna Group Pension Plan, variable universal life products sold through our corporate-owned life insurance business and other life insurance products.

These assets are legally segregated from our other businesses and are not included in General Account Invested Assets.

1 unchanged sentence

STRATEGIC INVESTMENTS

Cigna Ventures.

The Cigna Group Ventures.

In addition to the portfolio investments in our general and separate accounts discussed in the Investment Management section above that support our insurance operations, we make targeted investments within the health care industry, specifically.

In 2022, The Cigna Group committed an additional $450 million to Cigna Ventures, our strategic corporate venture fund, resulting in an aggregate commitment of $700 million to this strategic initiative.

Cigna Ventures invests in promising startups and growth-stage companies who, like us, are unlocking new growth possibilities in health care.

Specifically, we invest in companies

making groundbreaking progress in three strategic areas:

The Cigna Group has committed $700 million in aggregate since the formation of The Cigna Group Ventures, our strategic corporate venture fund which invests in promising startups and growth-stage companies who, like us, are unlocking new growth possibilities in health care.

We invest in companies making groundbreaking progress in three strategic areas:

insights and analytics, digital health and experience, and care delivery and enablement.

As of December 31, 2022, Cigna Ventures has seven venture capital partners and 22 existing direct investments.

As of December 31, 2023, The Cigna Group Ventures has approximately 10 venture capital partners and 25 existing direct investments.

Through these deep partnerships we collaborate, innovate and develop new solutions that address critical challenges of health and vitality impacting the people we serve.

As of December 31, 2022, the Company had a commitment to become a minority owner in VillageMD by investing up to $2.7 billion in VillageMD preferred equity.

In January 2023, we invested $2.5 billion of the $2.7 billion.

VillageMD is an independent primary care group committed to offering high-quality, accessible primary care options for communities across the country through Village Medical.

VillageMD partners with physicians to provide the tools, technology, operations, staffing support and industry relationships to deliver high-quality clinical care and better patient outcomes, while reducing the total cost of care.

VillageMD and Village Medical operate in 22 markets and are responsible for more than 1.6 million patients.

In 2023, we became a minority owner in VillageMD by investing $2.7 billion in VillageMD preferred equity.

VillageMD (majority-owned by Walgreens Boots Alliance, Inc.) provides health care services for individuals and communities across the United States, with primary, multi-specialty and urgent care providers serving patients in traditional clinic settings, in patients' homes and online appointments.

VillageMD and its subsidiaries operate in 26 markets and are responsible for millions of patients.

See Note 12 to the Consolidated Financial Statements for further discussion of this investment.

CarepathRx Health Systems Solutions.

In 2023, we acquired a minority interest in CarepathRx Health Systems Solutions.

See Note 5 to the Consolidated Financial Statements for further discussion of this investment.

DIGITAL, DATA AND TECHNOLOGY

1 unchanged sentence

We deliver value for our clients, customers and other stakeholders by creating better health outcomes, improving customer experience and lowering total cost of care.

Customer-centric, digital-first innovation remains at the forefront of our priorities.

The advancement of our internal capabilities and strategic partnerships continues to produce new and more effective ways to engage with our customers to help close gaps in care, optimize treatment and improve outcomes.

During 2022, technology continued to deliver value for current business while simultaneously focusing on reducing complexity and cost within our technology ecosystem.

In the future, with a simplified technology ecosystem, we expect an increase in optionality, customer engagement, loyalty and speed to market.

(See Evernorth Intelligence Solutions section of the " Business - Evernorth Health Services " discussion of this Form 10-K for additional information on our intelligent solutions and capabilities).

Customer-centric, digital-first, virtual-led vision for health care remains at the forefront of our priorities.

The advancement of our internal innovative capabilities and strategic partnerships continues to produce new and more effective ways to engage with our customers to help close gaps in care, optimize treatment and improve outcomes.

During 2023, the Technology team continued to deliver value for current business while simultaneously focusing on reducing complexity and cost within our technology ecosystem.

As we continue to simplify our technology ecosystem, we expect an increase in digital advancements, customer engagement, loyalty and speed to market.

In 2023, The Cigna Group continued to invest in our technology capabilities to produce new and more effective ways to operate, as well as meet customers where they are.

We intend to lead with digital engagement by creating connections between points of care and guiding customers through the best mechanism to the optimal location and provider.

Our modernized data and technology ecosystem will empower us to integrate our assets, gather insights and engage with prospects and customers in new ways.

Our modernized data and technology ecosystem will enable us to integrate our assets, gather insights and engage with prospects and customers in new ways.

For the year ended December 31, 2023, our capital expenditures for property, equipment and computer software were $1.6 billion.

The Cigna Group continued to transform and improve the way health care is delivered through automation, advanced analytics and Artificial Intelligence (“AI”) technologies.

We utilize these technologies today to analyze data and uncover patterns and insights to help improve outcomes, increase connectivity between the patient and the health care system, speed up administrative processes, and improve the overall member experience.

The Cigna Group continued to accelerate the pace of development and innovation through our new AI Center of Enablement ("COE").

Our AI COE focuses on Generative AI ("Gen AI"), and assesses and governs guardrails, systemic controls, and processes to provide oversight to ensure the responsible use of Gen AI practices.

These commitments are intended to ensure our Gen AI capabilities and

solutions are ethical, defensible, and in compliance with health care privacy and security requirements.

With these strict practices and protocols in place, we anticipate rapidly adapting and capitalizing on new opportunities in an increasingly competitive and fast-changing digital landscape.

Exploring and implementing new and emerging technology opportunities enables us to improve efficiency via automation, reduce costs and enhance overall decision-making, all while providing real-time, personalized and connected experiences for our customers, patients, clients and provider partners.

Data and Analytics.

6 unchanged sentences

The data-informed approach allows for delivery of solutions with a digital-first entry point that meet our customers where they are to offer physical and behavioral health support.

Our digital health focus has shown value across the enterprise by creating engaging experiences that give customers the right information at the right time.

We continue to bring new technology-enabled products and services to the market, expanding on a platform that connects to a given benefit structure in a single personalized environment.

This allows for further capitalization on our unique data.

Cybersecurity protections continue to be a top priority across The Cigna Group's digital offerings.

Our digital health focus has shown value across the enterprise by imagining the future of health care and creating engaging experiences that give customers the right information at the right time.

We continue to bring new and reusable technology-enabled products and services to the market, expanding on a platform that connects to a given benefit structure in a single personalized environment.

This allows for further capitalization on our unique data and enables the design of innovative digital solutions that improve health care experiences and provide more affordable health care for all.

Cybersecurity protections continue to be a top priority across The Cigna Group's digital offerings to further strengthen our security posture and grow the trust of those we serve.

Item C - Cybersecurity of this Form 10-K for additional information regarding our cybersecurity practices and governance.

Technology Operations.

Our technology team, powered by over 8,500 employees and several thousand external resources working with our partners, supports the various information systems essential to our operations, including the health benefit claims processing systems and specialty and home delivery pharmacy systems.

Our Technology team, powered by approximately 9,500 employees and several thousand external resources collaborating with our partners, supports the various information systems essential to our operations, including the health benefit claims processing systems and specialty and home delivery pharmacy systems.

Uninterrupted point-of-sale electronic retail pharmacy claims processing is a significant operational requirement for our business.

8 unchanged sentences

We are continually investing in our global workforce to support our employees' health and well-being, further drive diversity and inclusion, provide fair and market-competitive pay and foster employee growth and development.

As of the end of 2022, we had approximately 71,300 employees, with 94% of our employees based in the United States.

As of the end of 2023, we had approximately 72,500 employees, with approximately 93% of our employees based in the United States.

Approximately 97% of our employees are full-time.

1 unchanged sentence

Tending to our employees' health and vitality is a critical business imperative for our company and one of the most important investments in our enterprise that we make each year.

We believe that when we support our employees' health and well-being, they have fewer absences and are more productive and engaged in driving our mission and business strategy forward, thereby creating shareholder value.

We believe that when we support our employees' health and well-being, they are more productive and engaged in driving our mission and business strategy forward, thereby creating shareholder value.

In 2023, The Cigna Group invested approximately 18% of total payroll in health, well-being and other benefits, including life and disability programs, 401(k) contributions and retirement-related benefits for our employees in the United States.

In addition to traditional medical and pharmacy benefits, we provide both physical and mental health support to employees, including:

In addition to traditional medical and pharmacy benefits, we provide multi-dimensional wellness programming to support the physical, mental, financial, and social health, as well as overall vitality of employees, including:

nutrition and fitness programs, employee assistance program (EAP) benefits that are free to all employees and to all members of their household, and digital tools that provide access to education and therapy to help individuals build greater resilience and cope with stress, anxiety and depression.

1 unchanged sentence

At The Cigna Group, we take an expansive view of diversity including race, ethnicity, nationality, gender, veteran status, disability, sexual orientation and gender identity.

As of the end of 2022, based on employee self-reporting, 71% of our employees were women, and 39% of our employees in the United States were ethnic minorities (which includes Black / African American, Asian, Hispanic or Latinx, Pacific Islander and American Indian / Alaskan employees).

As of the end of 2023, based on employee self-reporting, approximately 71% of our employees were women, and approximately 41% of our employees in the United States were ethnic minorities (which includes Black / African American, Asian, Hispanic or Latino/a, Pacific Islander and American Indian / Alaskan employees).

We are committed to attracting and recruiting key diverse talent into various leadership development programs and other entry level positions across the business.

This success is rooted in strategic relationships with diverse student groups at our partner colleges and universities, as well as our commitment to multiple national, regional and local organizations, which provide us focused recruiting opportunities with women, the LGBTQ+ community, military veterans and underrepresented minority groups.

This success is rooted in strategic relationships with student groups at our partner colleges and universities, as well as our engagement with multiple national, regional and local organizations, which provide us focused recruiting opportunities with women, the LGBTQ+ community, military veterans and underrepresented minority groups.

Our compensation practices, rooted in our pay-for-performance philosophy, promote equity in pay through measures such as benchmarking compensation by role, eliminating inquiries regarding applicants' compensation history from the hiring process and monitoring for potential disparities.

Our most recent pay equity analysis among our U.S.

employees, conducted in 2023, illustrated that female employees of The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees, and employees from underrepresented groups (which includes Black/African American, Hispanic or Latinx, Pacific Islander and American Indian/Alaskan employees) earn more than 99 cents for every dollar earned by similarly-situated white employees.

This year, for the first time, we also analyzed gender pay on a global basis and found that across the entire Company female employees at The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees.

employees, conducted in 2024, illustrated that female employees of The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees, and employees from underrepresented groups (which includes Black/African American, Hispanic or Latino/a, Pacific Islander and American Indian/Alaskan employees) earn more than 99 cents for every dollar earned by similarly-situated white employees.

We also analyzed gender pay on a global basis and found that across the entire Company female employees at The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees.

Talent Acquisition, Development and Retention

1 unchanged sentence

Our compensation program is rooted in market competitive base salaries and incentives that reward contributions that advance the Company's strategy and mission.

Shifts in labor dynamics that started in the midst of the COVID-19 pandemic have continued to impact our employee population.

As we have adapted to new ways of working post-pandemic, where possible, employees work with their leaders to determine whether they work onsite, work at home, or leverage a hybrid option.

The level of worker attrition continues to be above our pre-pandemic levels as well:

in 2022, the voluntary turnover rate was 16% for all employees.

In previous 10-K filings, we reported the voluntary turnover rate only for exempt employees in the United States.

Our online learning platform and career development tools and events offer a broad range of training, education and development resources to all employees.

In 2022, based on internal data, U.S.

employees on average engaged in 34 hours of learning through these resources.

Enterprise leadership development programs were provided to executive, high-potential and new manager audiences to develop and expand leadership capability across the enterprise.

The Cigna Group also offers an education reimbursement program for both full and part-time employees who meet the continuing education criteria.

In 2023, the voluntary turnover rate was approximately 11% for all employees, signaling a return to pre-pandemic levels.

Our talent acquisition team is both online and on the ground in communities and at colleges and universities to find and recruit the best and brightest talent.

Our top ranked external career website allows candidates to learn about The Cigna Group and search for open positions.

We also leverage technology and an omnichannel strategy to create awareness and attract candidates through email, text message, social media, a quarterly newsletter, and one-to-one outreach from our recruiters.

We recognize the importance of flexibility in the workplace and provide schedules, tools, and support for employees to balance their work responsibilities with their life outside of work.

We also empower our employees to volunteer by offering two distinct benefit programs.

The first is volunteer time off, referred to as "Use Your 8," for eligible employees to take eight hours of paid leave annually to volunteer with a nonprofit of their choice.

The second is our Community Ambassador Fellowship, a program through which employees apply for up to three months of paid leave to support a specific community-based project.

To further engage and reward employees, we have an employee recognition program called Cigna Standout that allows employees to recognize their colleagues for their contributions to our Company and to celebrate both personal and professional milestones.

Every employee is empowered to use this system to recognize colleagues for going above and beyond or simply say thank you.

Our online learning platform and career development tools, including a career portal and career planning tool, offer a broad range of training, education and development resources to all employees.

In 2023, based on internal data, employees on average engaged in 30 hours of learning through these resources.

Enterprise leadership development programs are provided to executive, high-potential and new manager audiences to develop and expand leadership capability across the enterprise.

We also offer leadership development programs to recent graduates who seek valuable career experience with The Cigna Group, as well as opportunities for college students to join The Cigna Group for a paid summer internship.

The Cigna Group offers an education reimbursement program for both full and part-time employees who meet the continuing education criteria.

We believe these strategies and programs contribute to employee engagement and retention.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

The Cigna Group's environmental, social and governance ("ESG") framework is structured around four pillars that underscore our mission to improve the health and vitality of those we serve.

The Cigna Group's environmental, social and governance ("ESG") framework is structured around four connected pillars that underscore our enterprise mission to improve the health and vitality of those we serve.

We drive action through this framework to deliver on our ESG vision:

2 unchanged sentences

The four pillars of our ESG framework are:

Healthy Environment

We believe that responsible environmental stewardship can improve health and well-being and also makes sound business sense.

We strive to identify new efficiencies and make strategic investments to drive progress on our operational sustainability targets.

We aim to reduce our environmental impacts and our operating costs, but our commitments are not material to our results of operations, financial condition or liquidity.

Healthy Society

We work to advance better health for all.

Building a well-functioning, sustainable, accessible and equitable health care system involves understanding and addressing social determinants of health, advancing health equity and improving medical quality and access while prioritizing affordability, lowering health risks, promoting preventive health interventions and coordinating all aspects of care.

We advance better health for all.

Building a well-functioning, sustainable, accessible and equitable health care system requires understanding and addressing social determinants of health and improving medical quality and access while lowering health risks, promoting preventive health interventions and coordinating all aspects of care.

We drive progress in each of these areas by aligning our products and services with value-based care models, leveraging integrated benefits, managing drug costs through innovation, expanding digital offerings and reviewing coverage policies for health equity.

1 unchanged sentence

Healthy Workforce

We believe that employers play a vital role in the health care system, and we strive to be a model for others by prioritizing the health and well-being of employees within our own company.

We are advancing our diversity, equity and inclusion commitments, including by setting aspirational goals to increase gender equality in our leadership pipeline.

We are continuing to evolve our employee programs to meet the dynamic working environment and supporting our employees in their career growth as they support the growth of our business.

We believe that employers play a vital role in the health care system, and we strive to be a model for others by prioritizing the health and vitality of employees within our own company.

A healthy and diverse workforce is essential to achieving our mission, and we continually invest in our employees to support their health and vitality, to foster their growth and development and to further cultivate diversity and inclusion.

See further discussion of this pillar within Part I, Item 1 "Human Capital Management" section above.

Healthy Environment

We believe that responsible environmental stewardship can improve health and vitality and also makes sound business sense.

We strive to identify new efficiencies and make strategic investments that reduce our environmental impacts and our operating costs.

In addition, we see an opportunity to positively impact the environment through ways we are advancing our business, including through our continued investment in virtual care.

Healthy Company

We strive to promote positive societal impact, ethical behavior and responsible and resilient business practices across our multidimensional enterprise.

This includes adhering to strong board governance practices, protecting the sensitive data of our clients and customers by ensuring cybersecurity incident response preparedness, as well as supporting a responsible supply chain and committing to increasing our annual diverse supplier spend.

MISCELLANEOUS

• Revenues from U.S.

Federal Government agencies, under a number of contracts, represented 14% of our consolidated revenues in 2022 and 2021 and 15% in 2020.

• The Company does not rely on business from one or a few brokers or agents.

We have a deep and long-held commitment to strong governance as well as ethical and resilient business practices.

This includes protecting the sensitive data of our clients and customers by ensuring cybersecurity incident response preparedness, as well as supporting a responsible supply chain and committing to increasing our annual diverse supplier spend.

The laws and regulations governing our business continue to increase each year and are subject to frequent change.

18 unchanged sentences

If The Cigna Group is determined to have failed to comply with applicable laws or regulations, these examinations, audits, investigations, reviews, subpoenas and demands may:

• result in fines, penalties, injunctions, consent orders or loss of licensure;

• result in fines, penalties, injunctions, consent orders or other settlement agreements such as corporate integrity agreements or loss of licensure;

• suspend or exclude us from participation in government programs or limit our ability to sell or market our products;

9 unchanged sentences

COVID-19-related Regulatory Actions

In response to COVID-19 and its variants, U.S.

federal and state governments have increasingly enacted new legislative and regulatory requirements, as well as provided flexibility to industry participants within existing legal requirements.

These regulatory actions primarily provide for:

• mandating or requesting waiver of customer cost-sharing and other related costs such as COVID-19 testing or treatment, as well as establishing provider reimbursement and vaccine immunizations coverage requirements;

• extending claims filing deadlines for providers, customers and facilities;

• mandating or encouraging waiver of customer cost-share related to telemedicine services, as well as requiring certain reimbursement levels for telemedicine providers to encourage its utilization;

• increasing the Medicare fee-for-service reimbursement for certain items and services;

• enacting coverage and reimbursement requirements at in-network levels for certain services received from out-of-network providers;

• clarification regarding permissible sharing of information and coordination among health care providers;

• requiring vaccinations for certain employee populations.

These actions are in effect for various durations, but generally track the different states of emergency that have been declared at the state and federal levels.

Of particular significance is the Public Health Emergency ("PHE") declared by the Secretary of HHS on January 31, 2020, which has since been extended and sets the effective period for certain of the requirements established through federal COVID-19 legislation, such as covering testing without cost sharing.

On January 30, 2023, the Biden administration announced that it plans to end the PHE and Federal National Emergency on May 11, 2023.

With the PHE coming to an end, states will be required to resume Medicaid redeterminations for the first time since the PHE began.

These redeterminations will take place on a staggered basis, but it is anticipated that the remediations will find many beneficiaries are no longer eligible for Medicaid.

As a result, it is expected that beneficiaries determined to be ineligible for Medicaid may seek alternate coverage in the individual marketplace.

Patient Protection and the Affordable Care Act

On May 11, 2023, the COVID-19 Public Health Emergency ("PHE") declared by the Secretary of HHS ended.

Some of the legislative and regulatory flexibilities that the U.S.

federal and state governments enacted in response to COVID-19 and its variants which were not affected by the end of the PHE were made permanent or were extended.

Other legislative and regulatory flexibilities, such as required coverage of COVID-19 tests without cost sharing and certain Medicare and Medicaid waivers for health care providers, ended on May 11 or were set to expire within a certain period of time after the end of the PHE.

The Consolidated Appropriations Act, 2023, also provided that states could restart Medicaid eligibility renewals and terminations for ineligible individuals.

As a result, states resumed Medicaid redeterminations for the first time since the PHE began;

these redeterminations are anticipated to continue through early spring 2024.

While state approaches to redeterminations vary, under the redeterminations, many beneficiaries are no longer eligible for Medicaid.

As a result, some of the beneficiaries determined to be ineligible for Medicaid sought or will seek alternate coverage in the individual marketplace.

The Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act ("ACA") mandated broad changes to the U.S.

1 unchanged sentence

Our business model is impacted by the ACA, including our relationships with current and future producers and health care providers, products, service providers and technologies.

The provisions of the ACA imposed, among other things, certain assessments on health insurers, created health insurance exchanges for individuals and small group employers to purchase insurance coverage and implemented minimum MLRs for our Medicare and commercial businesses.

Certain states have adopted MLR requirements applicable to our commercial businesses that are more stringent than those established by the ACA.

Certain states have adopted MLR requirements applicable to our employer businesses that are more stringent than those established by the ACA.

Other provisions of the ACA in effect include reduced Medicare Advantage payment rates, the requirement to cover preventive services with no enrollee cost-sharing, banning the use of lifetime and annual limits on the dollar amount of essential health benefits, increasing restrictions on rescinding coverage, extending coverage of dependents up to age 26, restrictions on differential pricing, enforcement mechanisms and rules related to health care fraud and abuse enforcement activities and certain pharmacy benefit transparency requirements.

The employer mandate requires employers with 50 or more full-time employees to offer affordable health insurance that provides minimum value (each as defined under the ACA) to full-time employees and their dependents, including children up to age 26, or be subject to penalties based on employer size.

children up to age 26, or be subject to penalties based on employer size.

The ACA also changed certain tax laws to effectively limit tax deductions for certain employee compensation paid by health insurers.

3 unchanged sentences

Medicare and Medicaid Regulations

Through our subsidiaries, we offer individual and group Medicare Advantage, Medicare Prescription Drug ("Part D") and Medicare Supplement products.

Through our subsidiaries, we offer individual and group Medicare Advantage, Medicare Prescription Drug and Medicare Supplement products.

We also provide Medicare Part D-related products and services to other Medicare Part D sponsors, Medicare Advantage Prescription Drug Plans and employers and clients offering Medicare Part D benefits to Medicare Part D eligible beneficiaries, including those dually eligible for Medicare and Medicaid benefits ("dual-eligible").

10 unchanged sentences

For example, beginning with Star Ratings for payment year 2024, CMS will place more emphasis on patient experience survey-based measures which could reduce Star Ratings predictability year over year.

Additionally, as a result of the COVID-19 pandemic's impact on 2020 care patterns and utilization, CMS finalized rules applying relief to Medicare Advantage

and Part D Plan Star Ratings for payment year 2023 by utilizing the higher of the payment year 2023 or 2022 measure level Star Ratings.

The 2023 Star Ratings will only include adjustments as a result of the COVID-19 pandemic's impact for three Healthcare Effectiveness Data and Information Set measures, and we expect this change will result in a decrease in our Star Ratings for payment year 2024.

Additionally, as a result of the COVID-19 pandemic's impact on 2020 care patterns and utilization, CMS finalized rules applying relief to Medicare Advantage and Part D Plan Star Ratings for payment year 2023 by utilizing the higher of the payment year 2023 or 2022 measure level Star Ratings.

CMS provides risk-adjusted premium payments for Medicare Advantage plans based on our customer demographics and medical diagnoses, which may change from period to period based on the underlying health of our customers.

12 unchanged sentences

Audits for payment years prior to 2018 are not subject to extrapolation.

RADV audits for our contract years 2011 through 2015 are currently in process.

RADV audits for our contract years 2011 through 2015 are currently awaiting CMS finalization.

The Company is not currently subject to RADV audits for the 2018 and subsequent payment years.

The Final Rule is currently being challenged in federal district court.

Coverage of prescription drugs under Medicare Part D is also regulated by CMS and our contracts with CMS contain provisions for risk sharing and certain payments for prescription drug costs for which we are not at risk.

5 unchanged sentences

Noncompliance with these laws and regulations may result in significant consequences, including fines and penalties, enrollment sanctions, exclusion from the Medicare and Medicaid programs, limitations on expansion and criminal penalties.

In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses to HCSC for $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions.

False Claims Act and Anti-Kickback Laws

5 unchanged sentences

The False Claims Act imposes civil penalties on any person who knowingly, as defined by the statute, makes, conspires to make, or causes to be made false claims, records, or statements, or fails to return known overpayments, in connection with reimbursement by federal government programs such as Medicare and Medicaid.

Private individuals may bring qui tam or "whistleblower" suits under the False Claims Act, which authorizes the payment of a portion of any recovery to the individual bringing suit.

Private individuals have brought and may bring qui tam or "whistleblower" suits under the False Claims Act, which authorizes the payment of a portion of any recovery to the individual bringing suit.

The ACA amended the federal anti-kickback laws to state any claim submitted to a federal or state health care program that violates the anti-kickback laws is also a false claim under the False Claims Act.

1 unchanged sentence

Criminal statutes similar to the False Claims Act provide that if a corporation is convicted of presenting a claim or making a statement it knows to be false, fictitious or fraudulent to any federal agency, the corporation may be fined.

Conviction under these

statutes may also result in exclusion from participation in federal and state health care programs.

Conviction under these statutes may also result in exclusion from participation in federal and state health care programs.

Many states have also enacted laws similar to the False Claims Act, some of which may include criminal penalties, substantial fines and treble damages.

20 unchanged sentences

CMS has announced that its goal is to subject all Medicare Advantage contracts to either a comprehensive or a targeted RADV audit for each contract year.

The DOJ is also currently conducting industry-wide investigations of the risk adjustment data submission practices and business processes of The Cigna Group and a number of other Medicare Advantage organizations.

See Note 23 to the Consolidated Financial Statements for more information.

The DOJ is also currently conducting industry-wide investigations of the risk adjustment data submission practices and business processes of a number of Medicare Advantage organizations.

The Cigna Group was a party to such an investigation, which was settled during the third quarter of 2023.

Please see “—Medicare and Medicaid Regulations” for further information related to the settlement and the related CIA.

For our Medicare Part D business, compliance with certain contractual provisions and regulatory requirements is subject to review by Recovery Audit Contractor audits in which third-party contractors conduct post-payment reviews on a contingency fee basis to detect and correct improper payments.

7 unchanged sentences

ERISA is a complex set of federal laws and regulations enforced by the IRS and the DOL, as well as the courts.

ERISA regulates certain aspects of the relationship between us, the employers that maintain employee welfare benefit plans subject to ERISA and the

participants in such plans.

ERISA regulates certain aspects of the relationship between us, the employers that maintain employee welfare benefit plans subject to ERISA and the participants in such plans.

Certain of our domestic subsidiaries are also subject to requirements imposed by ERISA affecting claim payment and appeals procedures for individual health insurance and insured and self-insured group health plans and for the insured plans we administer.

7 unchanged sentences

Many of our activities involve Processing of PHI and PII.

In addition, we use aggregated and de-identified data for our own research and analysis purposes and, in some cases, provide access to such de-identified data, or analytics created from such data, to third parties.

In addition, we use aggregated and/or anonymized data for our own research and analysis purposes and, in some cases, when permitted, provide access to such anonymized data, or analytics created from such data, to third parties.

We may also use such information to create analytic models designed to predict, and potentially improve, outcomes and patient care.

We are also subject to the Payment Card Industry Data Security Standard, a set of requirements designed to help ensure that entities that Process credit card information maintain a secure environment.

On the federal level we are subject to a number of sector specific regulation.

The federal Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, the 21st Century Cures Act, Public Law 116-321, and the regulations that implement these laws (collectively "HIPAA") impose requirements on covered entities and business associates that address the privacy and security of PHI.

In the conduct of our business we may be either a covered entity or business associate, and we may also be held liable under HIPAA for violations by our vendors that are business associates.

HIPAA imposes contracting requirements, requires breach notifications, and establishes rules that standardize the format and content of certain electronic transactions, including eligibility and claims.

On the federal level we are subject to a number of sector specific regulations.

The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH") and the 21st Century Cures Act, Public Law 116-321, and as implemented by the regulation (collectively "HIPAA") impose requirements on covered entities and business associates that address the privacy and security of PHI.

In the conduct of the majority of our business we may be either a covered entity or business associate, and we may also be held liable under HIPAA for violations by our vendors, including downstream services providers, that are business associates.

HIPAA imposes contracting requirements and requires breach notifications.

HIPAA also regulates permissible uses and disclosures of PHI;

for example, HHS has issued guidance regarding tracking technologies that are used to collect and analyze information about how users interact with covered entities’ and business associates’ websites and mobile applications.

Violations of HIPAA may result in enforcement actions, civil and criminal penalties and settlement, resolution, and monitoring agreements.

1 unchanged sentence

There can be no assurance that we will not be the subject of an investigation, audit or compliance review regarding our compliance with HIPAA.

While HIPAA does not create a private right of action, its standards have been used as a basis for the duty of care in state civil suits, such as those for negligence or recklessness in the handling, misuse or breach of PHI.

HIPAA does not preempt more stringent state health privacy laws and regulations, which may protect the health information of certain individuals, such as minors, and certain types of sensitive health information, such as transgender care, HIV/AIDS status, reproductive health information, genetic information, and mental and behavioral health.

Other federal and state laws that restrict the use and protect the privacy and security of PII exempt data and/or entities subject to HIPAA, but several states, such as, Nevada, and Connecticut, have recently enacted privacy laws to protect consumer data and require consent for the collection, use, and sharing of consumer health data.

These laws may impact our businesses and practices where data collected is outside the reach of HIPAA.

The federal government has also enacted final regulations on interoperability and information blocking to support the seamless and secure access, exchange and use of electronic health information by and between patients, enrollees and entities such as payors and health care providers.

These regulations apply to a variety of entities , including health plans, and generally require significant enhancements to information technology and data governance practices.

These regulations apply to a variety of entities and generally require significant enhancements to information technology and data governance practices.

The regulations impact how industry participants, including us, comply with disclosure requirements and share information with individuals and other health care organizations.

1 unchanged sentence

State departments of insurance and certain federal agencies adopted implementing regulations as required by federal law.

In 2023, significant changes to GLBA's "Safeguards Rule" will go into effect, substantially raising the GLBA standards for security.

In 2023, significant changes to GLBA's "Safeguards Rule" went into effect, substantially raising the GLBA standards for security, which are anticipated to be adopted by some state DOIs (as defined herein).

Additionally, under Section 5 of the Federal Trade Commission Act ("FTC Act"), the FTC has jurisdiction over certain privacy and security practices deemed unfair and deceptive acts and practices in or affecting commerce.

1 unchanged sentence

In addition to the FTC Act, the FTC also enforces other federal laws relating to consumers' privacy and security.

The FTC has also been active with respect to companies' use of big data and artificial intelligence ("AI"), specifically ensuring fair and equitable use of these tools, and the FTC has named AI as an area of enforcement focus.

The FTC has also been active with respect to companies' use of big data and AI, specifically ensuring fair and equitable use of these tools, and the FTC has named AI as an area of enforcement focus.

State legislatures and regulators are similarly interested in the use of AI, particularly as it is used in modeling, and a handful of states have either passed legislation or issued regulatory guidance concerning AI.

Additionally,

the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, recently established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.

Additionally, the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, recently established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.

State Departments of Insurance ("DOI") and other state government agencies and legislatures are increasingly aware and active in providing guidance in the AI space.

The SEC has proposed additional cybersecurity disclosure obligations on reporting companies, with final rulemaking expected in 2023.

In July 2023, the SEC approved final rules relating to cybersecurity disclosure obligations on reporting companies and such new disclosures can be found beginning on page 45 .

The Cybersecurity Information Sharing Act of 2015 ("CISA") encouraged organizations to share cyber threat indicators with the federal government and, among other things, directed HHS to develop a set of voluntary cybersecurity best practices for organizations in the health care industry.

1 unchanged sentence

In October 2017, the NAIC adopted the Insurance Data Security Model Law that creates rules for insurers and other covered entities addressing data security, investigation and notification of breaches.

This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches and notifying regulators of a cybersecurity event.

This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches

and notifying regulators of a cybersecurity event.

As the model law is intended to serve as model legislation only, states will need to enact legislation for the model law to become mandatory and enforceable.

1 unchanged sentence

Over the past several years, the federal government has increasingly focused on the cybersecurity requirements applicable to government contractors, including enhanced guidance and regulation.

These include compliance with the Privacy Act of 1974, the Defense Federal Acquisition Regulation Supplement ("DFARS") cybersecurity requirements, the Cybersecurity Maturity Model Certification ("CMMC") (going into effect over the next four years and based on NIST standards), the Federal Information Security Modernization Act ("FISMA"), and the White House's 2021 Executive Order on Improving the Nation's Cybersecurity.

Some local authorities are increasing focused on protecting individuals from identity theft and a number of states have adopted comprehensive data security laws and regulations requiring, among other things, certain minimum data security standards and security breach notifications that may apply to us in certain circumstances, as well as certain limitations on access to and use of PII.

These include compliance with the Privacy Act of 1974, the Defense Federal Acquisition Regulation Supplement ("DFARS") cybersecurity requirements, the Cybersecurity Maturity Model Certification ("CMMC") (going into effect over the next four years and based on the National Institute of Standards and Technology ("NIST") standards), the Federal Information Security Modernization Act ("FISMA") and the White House's 2021 Executive Order on Improving the Nation's Cybersecurity.

Some local authorities are increasingly focused on protecting individuals from data or identity theft and every state has data security laws and regulations requiring, among other things, certain minimum data security standards and security breach notifications that may apply to us in certain circumstances, as well as certain limitations on access to and use of PII.

These laws and regulations include state general data breach laws, which exist in all fifty states and protect PII generally, as well as DOI cybersecurity laws, applicable to various DOI licensees, such as insurers, PBMs and TPAs.

Many states also have their own sector-specific laws regarding the Processing of PII which may apply to us as well.

In the past few years, five states have adopted their own comprehensive consumer privacy statutes and many more states are considering doing so.

In the past few years, fourteen states have adopted their own comprehensive consumer privacy statutes and many more states are considering doing so.

Generally, the statutes exempt data and/or entities regulated by GLBA and/or HIPAA but are, in varying respects, applicable to other data we collect, such as PII provided by website visitors, and in California, employees and business partners.

Additionally, we anticipate federal and state legislators and regulators will continue to enact legislation related to privacy and cybersecurity, including with respect to ransomware incidents.

Additionally, we anticipate federal and state legislators and regulators will continue to enact legislation related to privacy and cybersecurity.

In addition, international laws, rules and regulations governing the use and disclosure of PII can be more stringent than those in the United States, and they vary from jurisdiction to jurisdiction.

3 unchanged sentences

jurisdictions are also instituting data residency regulations requiring that data be maintained within the respective jurisdiction or otherwise restricting transfer of personal data across borders unless specified regulatory requirements are met.

Item 1A, "Risk Factors" for a discussion of the risks related to compliance with privacy and security regulations.

See Part I, Item 1A, "Risk Factors" for a discussion of the risks related to compliance with privacy and security regulations.

Consumer Protection Laws

2 unchanged sentences

With the ever increasing reliance and demand by consumers on using their mobile devices for convenient communications, we face increased risk under these laws.

The FTC is also increasingly exercising its enforcement authority in the areas of consumer privacy and data security, with a focus on web-based, mobile data and "big data." Federal consumer protection laws may also apply in some instances to privacy and security practices related to personally identifiable information.

State and federal policymakers have taken actions intended to increase transparency and predictability of health care costs for consumers.

For example, the Transparency in Coverage rule issued in October 2020 by the HHS, the DOL and the Department of the Treasury now requires most group health plans and health insurance issuers in the individual and group markets to publicly disclose

price and cost-sharing information for all items and services to participants and enrollees.

Health plans and health insurers must publicly disclose (i) in-network provider negotiated rates, and (ii) historical out-of-network allowed amounts and billed charges.

The rule also required public disclosure of in-network negotiated rates and historical net prices for all covered prescription drugs, but the departments announced in August 2021 guidance that they will indefinitely defer enforcement of the rule's requirement that plans and issuers publish machine-readable files relating to prescription drug pricing pending further rulemaking.

Beginning in 2023, we will be required to make available to members personalized cost-sharing information for 500 covered health care items and services.

In 2023, we were required to make available to members personalized cost-sharing information for 500 covered health care items and services.

In 2024, this cost-sharing information requirement will expand to all items and services, including prescription drugs.

1 unchanged sentence

Congress also passed the Consolidated Appropriations Act, 2021 ("CAA"), which included a number of transparency requirements on plans and issuers that are duplicative or overlap with the Transparency in Coverage rule issued by the departments.

The indefinite enforcement deferral of the prescription drug pricing file under the Transparency in Coverage rule is, in part, due to the subsequent enactment of the CAA, which requires plans to report information regarding prescription drug spending to federal regulators beginning in 2022.

The indefinite enforcement deferral of the prescription drug pricing file under the Transparency in Coverage rule is, in part, due to the subsequent

enactment of the CAA, which requires plans to report information regarding prescription drug spending to federal regulators beginning in 2022.

The CAA also included the No Surprises Act, which prohibits health care providers, in certain situations, from balance billing the patient and requires that they work directly with insurers to agree on out-of-network reimbursement, including utilizing an independent dispute resolution ("IDR") process outlined in the act.

CMS regulations and guidance implementing the IDR process have been subject to a significant amount of provider-initiated litigation, and CMS has had to temporarily suspend federal IDR functions, including dispute initiation.

Many states already have addressed balance billing, or surprise medical bills.

2 unchanged sentences

The departments then issued a final rule on August 26, 2022, finalizing disclosure requirements relating to information that group health plans and health insurance issuers offering group or individual health insurance coverage must share about the Qualifying Payment Amount ("QPA"), which the departments have stated is generally based on the median contracted rate for a qualified IDR item or service, and requirements related to the consideration of information when a certified IDR entity makes a payment determination under the federal IDR process.

The final rule was also challenged, and the final result is difficult to predict.

In September and October 2023, the Departments announced proposed rules that outlined fees established for the federal IDR process and that would set forth new requirements relating to the disclosure of information that group health plans and health insurance issuers offering group or individual health insurance coverage must include along with an initial payment or notice of denial for payment for certain items and services subject to the surprise billing protections.

The October 2023 proposed rule would also amend requirements related to the open negotiation period before the federal IDR process, the initiation of the federal IDR process, federal IDR dispute eligibility review, and the payment and collection of administrative fees and certified IDR entity fees.

Additionally, most states have consumer protection laws that have been the basis for investigations and multi-state settlements relating to financial incentives provided by drug manufacturers to retail pharmacies in connection with product conversion programs.

2 unchanged sentences

We are also subject to regulation by the Office of Foreign Assets Control of the U.S.

Department of the Treasury, which administers and enforces economic and trade sanctions against targeted foreign countries and regimes based on U.S.

Department of the Treasury, which administers and enforces economic and trade sanctions against targeted foreign jurisdictions and regimes based on U.S.

foreign policy and national security goals.

10 unchanged sentences

State legislatures have begun to propose and enact laws exempting certain providers from pre-authorization requirements of insurers.

These exemptions reduce the ability for insurers and medical management entities from reviewing services for medical necessity if the provider meets the law's established thresholds for approval rates in the preceding six months.

These exemptions reduce the ability for insurers and medical management entities to review services for medical necessity if the provider meets the law's established thresholds for approval rates in the preceding six months.

The inability to apply pre-authorization requirements could lead to increased costs to plan issuers by way of the provision of unnecessary services.

3 unchanged sentences

Some states have enacted laws that prohibit managed care plan sponsors from implementing certain restrictive benefit plan design features, and many states have laws or have introduced legislation to regulate various aspects of managed care plans, including provisions relating to the pharmacy benefit.

For example, some states, under so-called "freedom of choice" legislation, provide that customers of the plan may not be required to use network providers, but must instead be provided with benefits even if they choose to use non-network providers.

use non-network providers.

Some states have also enacted legislation that can negatively impact the use of cost-saving network configurations for plan sponsors, such as limiting the implementation of pharmacy benefit designs and reimbursement structures that leverage affiliate pharmacies to reduce costs.

33 unchanged sentences

We expect federal and state governments to continue to prioritize means of addressing out-of-pocket costs for consumers, particularly related to prescription drug costs.

Recently enacted legislation, and other policy proposals and regulations vary broadly in their approaches to achieve that goal.

For example, proposed legislation includes, among other things, the Pharmacy Benefit Manager Transparency Act;

the Pharmacy Benefit Manager Accountability Study Act;

a repeal of the 2020 Medicare drug rebate, as described above under the heading "False Claims Act and Anti-Kickback Laws—Anti-Kickback and Referral Laws;" and limits on manufacturer price increases for prescription drugs.

Recently enacted legislation, such as the Inflation Reduction Act, which changed Medicare Part B beneficiary coinsurance for certain drugs and imposed caps on out-of-pocket prescription drug costs in Medicare Part D, and other policy proposals and regulations, such as proposed legislation aimed at providing transparency with respect to pharmacy benefit managers, vary broadly in their approaches to achieve that goal.

Additionally, proposals at the federal and state levels consider increased regulation of pharmacy benefit managers and health plans as a means to limit consumer out-of-pocket costs, including:

3 unchanged sentences

expanding regulatory requirements or definitions of fiduciaries;

mandating plan benefit designs that cap consumer out-of-pocket expense.

or 29 mandating plan benefit designs that cap consumer out-of-pocket expense.

The NAIC has also proposed laws intended to protect consumer drug benefits and has examined regulatory approaches to pharmacy benefit manager business practices.

3 unchanged sentences

Some states have also enacted laws regulating pharmacy pricing and protecting the profitability of pharmacies for dispensing certain MAC-priced drugs.

Some states have enacted laws requiring that the customer cost-share for a prescription drug claim not exceed certain price points, such as the pharmacy's usual and customary charge or its contracted reimbursement for the drug.

Some states have enacted laws requiring that the customer cost-share for a prescription drug claim not exceed certain price points, such as the pharmacy's usual and customary charge or its contracted

reimbursement for the drug.

In a recent Supreme Court decision, the Court found that certain MAC Transparency Laws may be applied by states to ERISA plans in addition to health plans regulated by the applicable state.

Following this decision, state legislatures and regulators have sought to extend their oversight authority of self-funded ERISA plans to pharmacy benefit management functions and pharmacy benefit plan designs beyond MAC pricing.

The federal Medicaid Drug Rebate Program requires participating drug manufacturers to provide rebates on all drugs reimbursed through state Medicaid programs, including through Medicaid managed care organizations.

Manufacturers of brand-name products must provide a rebate equivalent to the greater of (a) 23.1% of the average manufacturer price ("AMP") paid by retail community pharmacies or by wholesalers for certain drugs distributed to retail community pharmacies, or (b) the difference between AMP and the "best price" available to essentially any customer other than the Medicaid program and certain other government programs, with certain exceptions.

The Medicaid Drug Rebate Program requires participating drug manufacturers to report certain information and pay rebates on drugs reimbursed through state Medicaid programs, in accordance with applicable law and regulation.

We negotiate rebates with drug manufacturers and, in certain circumstances, sell services to drug manufacturers.

Investigations are being and have been conducted by certain government entities which call into question whether a drug's "best price" was properly calculated and reported with respect to rebates paid by the manufacturers to the Medicaid programs.

We are not responsible for such calculations, reports or payments.

In February 2022, the FTC began soliciting public comment on pharmacy benefit manager practices and their impact on patients, physicians, employers, independent and chain pharmacies, and other businesses in pharmaceutical distribution.

In June 2022, the FTC announced an inquiry into pharmacy benefit managers and stated the FTC was seeking information concerning the competitive impact of the contracting and business practices of pharmacy benefit managers.

The FTC required the six largest pharmacy benefit managers to provide information and records on topics including rebate contracts and ancillary agreements, documents related to strategies, conditions and plans for formulary placement, formulary exclusion, formulary tier assignment, and prior authorization regarding rebated drug products, and annual pharmacy reimbursement data for drugs on specialty drug lists and for rebated drug products.

In July 2022, the FTC issued an enforcement policy statement indicating the FTC would scrutinize the impact of rebates and fees paid by pharmaceutical manufacturers to pharmacy benefit managers and other intermediaries to determine if laws such as the FTC Act, the Clayton Act, the Robinson-Patman Act and the Sherman Act may have been violated.

Investigations are being and have been conducted by certain government entities involving manufacturer calculation and reporting with respect to rebates paid by the manufacturers to the Medicaid programs.

Our PBM is not responsible for such calculations, reports or payments.

There can be no assurance that our ability to negotiate rebates with, or sell services to, drug manufacturers will not be unfavorably affected by investigations or regulations in the future.

Pharmacy Regulation

8 unchanged sentences

Other statutes and regulations affect our home delivery and specialty pharmacy operations, including the federal and state anti-kickback laws, federal and state false claims acts and the federal civil monetary penalty law described above.

Federal and state statutes and regulations govern the labeling, packaging, repackaging, compounding, storing, holding, disposal, distribution, advertising, misbranding, adulteration, transfer, handling and security of prescription drugs and the dispensing of prescription, over-the-counter,

hazardous and controlled substances and certain of our pharmacies must register with the U.S.

Drug Enforcement Administration, the U.S.

8 unchanged sentences

Certain insurance and HMO subsidiaries are required to file an annual report of internal control over financial reporting with most jurisdictions in which they do business.

Insurance and HMO subsidiaries' operations and financial statements are subject to examination by such agencies.

Insurance and HMO subsidiaries' operations and financial statements are subject to examination by regulators.

Many states have expanded regulations relating to corporate governance and internal control activities of insurance and HMO subsidiaries as a result of model regulations adopted by the NAIC with elements similar to corporate governance and risk oversight disclosure requirements under federal securities laws.

25 unchanged sentences

In addition, the holding company acts of states in which our subsidiaries are domiciled restrict the ability of any person to obtain control of an insurance company or HMO subsidiary without prior regulatory approval.

State holding company laws and regulations also subject our insurance companies and certain HMO subsidiaries to additional regulatory scrutiny related to their oversight of affiliates

performing regulated services on behalf of the insurance company or HMO and require the Company to file an annual Enterprise Risk Report, which summarizes material risks that could pose enterprise risk to the insurance company subsidiaries.

State holding company laws and regulations also subject our insurance companies and certain HMO subsidiaries to additional regulatory scrutiny related to their oversight of affiliates performing regulated services on behalf of the insurance company or HMO and require the Company to file an annual Enterprise Risk Report, which summarizes material risks that could pose enterprise risk to the insurance company subsidiaries.

Marketing, Advertising and Products

1 unchanged sentence

Our insurance companies and HMO subsidiaries are also required by most states to file and secure regulatory approval of products prior to the marketing, advertising and sale of such products.

Additionally, our Medicare Advantage and Medicare Part D plans must follow certain federal marketing and communications regulations.

In April 2023, CMS issued a final rule revising regulations governing marketing by Medicare Advantage and Medicare Part D plans.

Among other things, the final rule requires enrollees to be notified of their ability to opt out of phone calls regarding Medicare Advantage and Part D marketing, requires agents to explain the effect of an enrollee’s enrollment choice on their current coverage, simplifies plan comparisons by requiring medical benefits to be listed in a specific order at the top of a plan’s Summary of Benefits, requires Medicare Advantage organizations and Part D sponsors to have an oversight plan that monitors activities of agents and brokers and to report noncompliance to CMS, and limits the time a potential enrollee may be contacted about Medicare plan options to 12 months after the enrollee first asked for information.

Licensing and Registration Requirements

Our insurance companies and HMO subsidiaries must be licensed by the jurisdictions in which they conduct business.

Additionally, certain subsidiaries contract to provide claim administration, utilization management and other related services for the administration of self-insured benefit plans.

Additionally, certain subsidiaries contract to provide claim administration, utilization management and other related services for the administration

of self-insured benefit plans.

These subsidiaries may be subject to state third-party administration and other licensing requirements and regulation, as well as third-party accreditation requirements.

We have received full accreditation for Utilization Review Accreditation Commission Pharmacy Benefit Management version 2.2 Standards, which includes quality standards for drug utilization management, and select subsidiaries have received full accreditation for Utilization Review Accreditation Commission for Health Utilization Management version 7.2, which includes quality standards for medical utilization management.

We have received full accreditation for URAC Pharmacy Benefit Management Standards version 3.1, which includes quality standards for drug utilization management, and select subsidiaries have received full accreditation for URAC Health Utilization Management version 7.4, which includes quality standards for medical utilization management.

Certain states have adopted pharmacy benefit management registration, licensure or disclosure laws.

19 unchanged sentences

The UK Bribery Act of 2010 applies to all companies with a nexus to the United Kingdom.

Under this act, any voluntary disclosures of FCPA violations may be shared with United Kingdom authorities, thus potentially exposing companies to liability and potential penalties in multiple jurisdictions.

Other countries in which we do business also have anti-corruption laws to which we are subject.

As international regulators often share information, any voluntary disclosures of violations may be shared with authorities in other countries, thus potentially exposing companies to liability and potential penalties in multiple jurisdictions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business